DP World takes China Merchants to court

DP World, the global terminal operator from the United Arab Emirates, has taken legal action against state-backed China Merchants for building an international free zone on Doraleh Container Terminal, a facility being disputed with Djibouti.

The lawsuit was filed in the High Court of Hong Kong for unlawfully procuring and inducing the republic of Djibouti to breach various agreements between the African country and DP World.

In the lawsuit, DP World sought damages, interest, and a declaration that China Merchants unlawfully procured and/or induced Djibouti’s breaches of its agreements with DP World.

DP World had had a concession in Djibouti since 2006. The government in Djibouti had tried to get DP World to renegotiate its contract since last December. In February the government terminated DP World’s contract and has since welcomed China Merchants to increase its presence at the port.

In a statement the government of Dubai said: “DP World will continue to pursue all legal means to defend its rights as a shareholder and concessionaire in Doraleh Container Terminal in the face of Djibouti’s blatant disregard for the rule of law and respect for commercial contracts.”