Djibouti nationalises port company stake in DP World dispute

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Tuesday 11, September 2018

(Bloomberg)--Djibouti’s government nationalised the national port company’s stake in the Doraleh Container Terminal, escalating its battle with DP World Ltd. for control of the harbour.

The step comes a month after a UK tribunal ruled that Djibouti’s cancellation in February of DP World’s contract to run DCT was unlawful. It also follows the High Court of England & Wales’ granting of an injunction last week restraining Port de Djibouti SA, or PDSA, from treating its joint-venture agreement with DP World as terminated.

The government “has decided to nationalise with immediate effect all the shares and social rights of PDSA in the DCT company to protect the fundamental interests of the nation and the legitimate interests of its partners,” the presidency said in an emailed statement Monday. “DP World will therefore have the state of Djibouti as a single interlocutor for all the discussions regarding the consequences of the concession contract termination.”

PDSA is 76.5 per cent owned by the government of Djibouti, according to the website of Hong Kong-based China Merchants Port Holdings Co., which bought 23.5 per cent of PDSA for $185 million in 2012. While PDSA owns 66.66 per cent of DCT, the company was “controlled de facto” by DP World until the concession was terminated, according to the statement.

DP World didn’t immediately respond to a request for comment. The United Arab Emirates’ Foreign Ministry didn’t immediately respond to calls and emails seeking comment. Djiboutian Foreign Minister Mahamoud Ali Youssouf, Finance Minister Ilyas Dawaleh and ports authority Chairman Aboubaker Omar Hadi each didn’t immediately respond to three emails seeking comment.

The High Court of England & Wales instructed PDSA not to “interfere” with the DCT’s management until further court orders or a resolution of the dispute by the UK-based tribunal, according to a 5 September emailed statement from Dubai’s government.

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