Djibouti dismisses ruling on Doraleh, says ‘not surprised’

Djibouti has dismissed a ruling by the London Court of International Arbitration which found it in offense of breaching the terms of Doraleh Container Terminal concession after it ejected the ports operator DP World from operating the terminal last year.

Djibouti government said in a statement it was not surprised by the ruling. “It is merely the outcome of the iniquitous provisions of the concession, which could force a sovereign state to set aside and disregard its own national law, in order to revive a concession that was terminated on the grounds of the higher interest of the Djiboutian nation, and for the exclusive benefit of a foreign-owned company,” the statement read in part.

Under no circumstance can the Republic of Djibouti accept such a ruling, the government said noting, it ‘was handed down in an arbitration in which it did not take part and which flouts the rules of international law.

The London based arbiter ruled last week Djibouti government violated the terms of the concession signed by the two parties in 2006. Djibouti nationalized the terminal last February and ejected DP World from the facility. It said DP World had not fully exploited the capacity of the terminal to avoid competition with Dubai port.

Following the seizure, Djibouti said the output of the terminal has gone up by 30%. DP World said it had lost $1billion as a result of the breach.

Following the termination of the Doraleh concession, Djibouti has since opened a Chinese-backed $3.5bn free trade zone, in which China Merchants Group and Dalian Port Authority have an interest.

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