DP World CEO: All options open following Djibouti port court ruling – CNBC
DP World’s chairman and CEO has told CNBC that he is looking at all options after a ruling by the London Court of International Arbitration (LCIA) found that its operating contract for a port container terminal in Djibouti was “valid and binding.”
The Djibouti government wrested control of the Doraleh Container Terminal from the Dubai-based firm in February. Djibouti officials have long wanted to renegotiate the terms for the port’s operating contract that DP World has held since 2006.
Sultan Ahmed Bin Sulayem, DP World chairman & CEO, told CNBC’s Willem Marx that the LCIA’s ruling was expected.
“What they (Djibouti government) did was illegal and we needed just the legal authority to say that,” he said over the phone on Thursday.
Bin Sulayem said the legal ruling meant that all options are open to his company and he would now meet with advisers before proceeding with steps to reach compensation.
Djibouti Ports and Free Zone Authority (DPFZA) said in March it was willing to buy out DP World’s 33 percent stake in the container terminal, but Bin Sulayem said no contact or discussion over any sale had ever been made.
He said he would now seek continued arbitration between the two parties to reconfirm rights, to validate the contract, and to “expose illegal activities of Djibouti.”
Bin Sulayem added that it was a worrying development for capital making its way to the African continent.
“I can tell you it is putting a shadow on investment in Africa and it is making such investment more expensive. We continue to invest but I’m sure others are looking at this as an example,” he said.
The Doraleh Container Terminal is the largest employer in Djibouti. The country is small but attracts investment because of its strategic location where the Red Sea meets the Gulf of Aden.
DP World has a number of investments in East Africa, including one in Berbera, Somaliland. The region’s self-proclaimed independence remains unrecognized by any country or international organization.
However, Bin Sulayem told CNBC that he had no issue in investing with the autonomous government in Somaliland and there was no need to go through the official Somali government.
“The argument between Somaliland and Somalia clearly recognizes that the economic activity in the region belongs to Somaliland. What we have done is within the law.”