The ruling of London Court of International Arbitration (LCIA) upholding the continuing validity of DP World's concession of a terminal in the country is internationally binding both on the Djibouti government and on third parties, DP World has claimed.

 

The Arbitral Tribunal has confirmed the illegitimacy of Government of Djibouti’s action of seizing control of the Doraleh Container Terminal from DP World, a Wam news agency report said quoting a DP World press statement.

 

The statement follows Djibouti's refusal to recognise the London tribunal's ruling.

 

The tribunal had ruled that the concession agreement awarded to DP World in 2006 to operate the terminal “remains valid and binding notwithstanding Law 202 and the 2018 decrees (issued by the Djibouti government)”, DP world said earlier.

 

However, the government of Djibouti and the Djibouti Ports and Free Zones Authority said the concession agreement contained “severe irregularities and threatened the national interest and sovereignty of Djibouti”, a press office of the Presidency of Djibouti statement said.

 

“The Republic of Djibouti does not accept this sentence, which has ruled that the law of a sovereign state cannot be enforced by that state," the statement said.

 

Djibouti cancelled DP World’s contract to run the terminal in February and seized its facilities, which the port operator had designed, built and operated.

 

''The court’s decision upholding the continuing validity of the concession is based on recognised principles of international law and is internationally binding both on the Djibouti government and so far as third parties are concerned,'' said the DP World's latest statement.

 

''As the court has held, Djibouti does not have sovereignty over a contract governed by English law. It is well established that, in the absence of an express term to that effect, an English law contract cannot be unilaterally terminated at will. The contract, therefore, remains in full force and effect,'' it explained.

 

"The Djibouti government’s repeated statements that the port concession has proved contrary to the fundamental interests of the Republic of Djibouti do not bear scrutiny. As the court’s decision records, the government’s own representatives have given evidence that the port has been 'a great success for Djibouti', it said. 

 

"The terms of the concession have also been held in two previous cases brought by the government itself to have been 'even-handed and fair'. In light of that indisputable success, and the fair and reasonable terms of the concession, the government’s attempts to terminate it cannot have anything to do with the fundamental interests of the people of Djibouti," it added.