Brief: Arbitration Tribunal Rejects Djibouti Port's Bid To Escape Contract With DP World

China Merchants Port Holdings

12/07/2021 13:35

July 12 (Reuters) - DUBAI MEDIA OFFICE:
    * ARBITRATION TRIBUNAL REJECTS DJIBOUTI PORT COMPANY’S BID
TO
ESCAPE CONTRACT WITH DP WORLD 
    * AN ARBITRAL TRIBUNAL OF LONDON COURT OF INTERNATIONAL
ARBITRATION (LCIA) HAS RULED AGAINST DJIBOUTI’S PORT COMPANY,
PORT DE DJIBOUTI S.A. (PDSA), IN ITS DISPUTE WITH DP WORLD,
CONFIRMING THE UNLAWFULNESS OF ITS EFFORT TO TERMINATE ITS JOINT
VENTURE AGREEMENT AND TRANSFER ITS SHARES TO THE STATE
    * ARBITRATOR FINDS DJIBOUTI’S PORT COMPANY WRONGFULLY TRIED
TO
TERMINATE JOINT VENTURE AGREEMENT AND TRANSFER ITS SHARES TO THE
STATE
    * PDSA IS 23.5% OWNED BY CHINA MERCHANTS PORT HOLDINGS
COMPANY LTD
OF HONG KONG (CHINA MERCHANTS), AND THE REST OF ITS SHARES ARE
HELD BY THE GOVERNMENT OF DJIBOUTI
    * ON 23 FEBRUARY 2018, THE GOVERNMENT ILLEGALLY SEIZED
CONTROL OF
THE DORALEH CONTAINER TERMINAL FROM DP WORLD, WHO DESIGNED,
BUILT AND OPERATED THE TERMINAL FOLLOWING A CONCESSION AWARDED
IN 2006
    * UNTIL THE SEIZURE, THE TERMINAL WAS BEING MANAGED UNDER A
JOINT
VENTURE BETWEEN DP WORLD AND PDSA.  IN JULY 2018, PDSA
UNILATERALLY DECLARED THAT ITS JOINT VENTURE AGREEMENT WITH DP
WORLD WAS TERMINATED
    * THE TRIBUNAL RULED THAT THE JOINT VENTURE AGREEMENT WAS
NOT
TERMINATED AND REMAINS IN FULL FORCE AND EFFECT
    * THE ARBITRATION WILL NOW PROCEED TO A SECOND PHASE TO
DECIDE THE
DAMAGES OWED BY PDSA TO DP WORLD
    * PDSA HAS ALSO BEEN ORDERED TO REIMBURSE DP WORLD’S LEGAL
COSTS
TO DATE IN THE SUM OF GBP 1.7 MILLION

Source: (https://bit.ly/2T3GU1t)


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