The Government of Djibouti illegally seized control of the Doraleh Container Terminal S.A. (the “Terminal”) from a Dubai Ports World (“DP World”) owned entity that designed, built and, since 2006, operated the Terminal pursuant to a concession awarded by the Government in 2006, the company said in its press release. The state - of - the - art Terminal is the largest employer and biggest source of revenue in the country. It has operated at a profit every year since it opened.
The illegal seizure of the Terminal is the culmination the Government’s campaign to force the DP World to renegotiate the terms of the concession. Those terms were found to be “fair and reasonable” by a London Court of International Arbitration tribunal led by Lord Leonard Hoffman and Sir Richard Aikens, both highly respected former English jurists. DP World has commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.
Since December 2017, the Government of Djibouti has sought to enforce the law against the concession contract entered into between DP World and Doraleh Container Terminal SA and the Government, related to the container terminal at Doraleh. This effort culminated in a final demand that the contract be renegotiated by 21 February 2018, and the termination of that contract by Presidential Decree on 22 February 2018 and expropriation of all of the assets of Doraleh Container Terminal SA.
DP World has a 33% equity stake in the port of Doraleh (Djibouti) which has a capacity of 1.25 mn TEU's. DP World can confirm that there will be no material financial impact to the Group.