Djibouti nationalizes Doraleh Container Terminal

In a further escalation of the long-running dispute between Djibouti and DP World over the running of the Doraleh Container port on the Red Sea, the country has nationalized the terminal, taking over Port de Djibouti (PDSA)’s 66.66% stake.

Representatives of the state in the governing bodies of the company will now be appointed by decree, meaning that DP World will be dealing directly with the State of Djibouti for all the discussions relating to the contract termination.

DP World was ejected from the port earlier this year in a dispute over profit allocation. In August a London Court ruled in favour of DP World, but Djibouti has refused to abide by the ruling. The court said that the agreement between Djibouti and DP World was binding and that Djibouti’s seizing of control of the port in February was illegal. Djibouti said that the ruling disregarded the sovereignty of the country, while DP World said that Djibouti was refusing to recognized the international rule of law, because Djibouti did not have sovereignty over a contract governed by English law.