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DP World: English High Court Continues Restraint against Djibouti Port Company over Shares in Joint Venture

September 27, 2018

DUBAI, United Arab Emirates--(BUSINESS WIRE)--Sep 27, 2018--The High Court of England and Wales in London has continued the injunction first made on 31 August 2018, prohibiting the Government of Djibouti’s port company, Port de Djibouti S.A. (“PDSA”) from interfering with the management of the joint venture company, Doraleh Container Terminal S.A. (“DCT”).

On 31 August, the Court issued a without notice injunction against PDSA, as shareholder in DCT, prohibiting the following actions:

It shall not act as if the joint venture agreement with DP World has been terminated It shall not appoint new directors or remove DP World’s nominated directors without its consent It shall not cause the DCT joint venture company to act on “Reserved Matters” (being matters contractually reserved to DP World) without DP World’s consent. It shall not instruct or cause DCT to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti.

Following a hearing on 14 September 2018, at which PDSA failed to appear despite being notified, the Court ordered that the injunction will continue until it makes a further order or an award of the arbitration tribunal at the London Court of International Arbitration (“LCIA”) that will be formed imminently to consider the shareholding dispute with DP World.

On DP World’s application, the Court also extended the injunction to include any ‘affiliate’ of PDSA. Under the JV Agreement, PDSA’s affiliates include the Government. The decision follows the enactment of an “emergency” ordinance by the President of Djibouti on 9 September. This ordinance purported to transfer PDSA’s shares in DCT to the Government of Djibouti.

PDSA is 23.5% owned by China Merchants Port Holdings Company Ltd of Hong Kong (“China Merchants”).

The Court further ordered that PDSA must ensure that any transferee of DCT shares is legally bound by the Joint Venture Agreement and Articles of Association in the same way as PDSA. The ruling means neither the Government nor PDSA can control DCT or give valid instructions to third parties on behalf of DCT without DP World’s consent.

DP World confirmed last week it will continue to pursue all legal means to defend its rights as shareholder and concessionaire in the Doraleh Container Terminal in the face of the Government’s blatant disregard for the rule of law and respect for binding commercial contracts.

A DP World spokesperson, said: “This is yet another in a series of rulings – all in favour of DP World – that demonstrate Djibouti’s continuing disregard for the rule of law. We underline our belief that companies intending to operate in such a country or already operating there need to seriously consider their dealings with this Government in the face of such behaviour.”

The 2006 Concession Agreement that the Government awarded to DP World is governed by English law. It provides that all disputes relating to the Agreement are to be resolved through binding arbitration at the LCIA with two such LCIA proceedings already completed.

In the first proceeding, the Government filed an arbitration against DP World seeking to rescind the Concession Agreement, claiming its terms were unfair to the Government and were procured through bribery. The LCIA tribunal (comprising Sir Richard Aikens, Lord Hoffmann, Peter Leaver QC) ruled against the Government, finding the terms were fair and there was no bribery. Certain counterclaims raised by DCT and DP World in relation to DP World’s exclusive right to container handling facilities in Djibouti remain to be decided by the Tribunal.

In a separate proceeding, another LCIA Tribunal (comprising Professor Zachary Douglas QC) held that the 2006 Concession Agreement was valid notwithstanding the Government’s attempts to terminate it through special legislation and decrees. DP World’s claims for damages against the Government will now be determined in these proceedings.

To date, the Government has not made any offer to compensate DP World.

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Follow DP World on: Twitter: https://twitter.com/DP_World

LinkedIn: https://www.linkedin.com/company/dp-world

About DP World: DP World 14 is a leading enabler of global trade and an integral part of the supply chain. We operate multiple yet related businesses – from marine and inland terminals, maritime services, logistics and ancillary services to technology-driven trade solutions. We have a portfolio of 78 operating marine and inland terminals supported by over 50 related businesses in over 40 countries across six continents with a significant presence in both high-growth and mature markets. We aim to be essential to the bright future of global trade, ensuring everything we do has a long-lasting positive impact on economies and society.

Our dedicated team of over 36,000 employees from 103 countries cultivates long-standing relationships with governments, shipping lines, importers and exporters, communities, and many other important constituents of the global supply chain, to add value and provide quality services today and tomorrow.

Container handling is the company’s core business and generates more than three quarters of its revenue. In 2017, DP World handled 70.1 million TEU (twenty-foot equivalent units) across our portfolio. With its committed pipeline of developments and expansions, the current gross capacity of 88.2 million TEU is expected to rise to more than 100 million TEU by 2020, in line with market demand. By thinking ahead, foreseeing change and innovating we aim to create the most productive, efficient and safe trade solutions globally.

View source version on businesswire.com:https://www.businesswire.com/news/home/20180927005296/en/

CONTACT: For DP World media enquiries

Sanaa Maadad

Corporate Communications Manager

Tel: +971 505522610

sana.maadad@dpworld.com

or

Mike Vertigans

Senior Corporate Communications Manager

Tel: +971 566769324

michael.vertigans@dpworld.com

KEYWORD: UNITED ARAB EMIRATES UNITED KINGDOM EUROPE DJIBOUTI AFRICA MIDDLE EAST

INDUSTRY KEYWORD: TRANSPORT MARITIME PROFESSIONAL SERVICES LEGAL

SOURCE: DP World

Copyright Business Wire 2018.

PUB: 09/27/2018 04:00 AM/DISC: 09/27/2018 04:01 AM

http://www.businesswire.com/news/home/20180927005296/en

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