DP World, Djibouti continue to spar over terminal

The government insists it has the right to cancel concession contract.    The Dubai-based port operator DP World and the government of Djibouti are continuing their war of words over who has the right to operate a container terminal in Djibouti.
   The government of Djibouti says a concession agreement granted to DP World in 2006 to operate the Doraleh Container Terminal in its capital city “contained severe irregularities and threatened the national interest and sovereignty of Djibouti,” leading it to terminate the concession in February this year.
   Djibouti made the statement on Friday following a ruling by an arbitrator in London the day before that Djibouti seized the terminal using “devices … to evade Djibouti’s contractual obligations.”
   Located near where the Red Sea and Gulf of Aden meet, the Republic of Djibouti said in a statement that it, the Djibouti Ports and Free Zones Authority “have repeatedly tried to negotiate a fair compensation with DP World. We are now more convinced than ever that a compensatory settlement is the only option in line with international law.”
   Djibouti insisted that its termination of the contract with DP World “conforms to international law,” and said it had not participated in the arbitration proceeding before the U.K.-based London Court of International Arbitration, which rendered a decision in DP World’s favor last week.
   “International law recognizes the ability of a sovereign nation to unilaterally cancel a concession contract on the grounds of public interest, subject to the payment of fair compensation to the other party,” said the statement from Djibouti. 
   DP World responded by saying in the statement on Friday that its contract “remains in full force and effect.”
   Not acknowledging the arbitration decision of the London Court of International Arbitration “demonstrates that Djibouti does not recognize the international rule of law,” said DP World, adding that the arbitration decision “upholding the continuing validity of the concession is based on recognized principles of international law and is internationally binding both on the Djibouti government and so far as third parties are concerned.”
    It said the terminal had been a success, that the concession terms were “fair and reasonable” and said the government’s “attempts to terminate it cannot have anything to do with the fundamental interests of the people of Djibouti.”