The London Court of International Arbitration (LCIA) has issued its final ruling in the long-running dispute between DP World and Djibouti’s government-owned Port de Djibouti SA (PDSA), confirming that the 2018 seizure of the Doraleh Container Terminal (DCT) by the Government of Djibouti was unlawful.
While the Tribunal ruled that PDSA itself is not liable for damages, noting that the harm resulted from actions by the Djibouti government rather than PDSA, DP World’s claims of around $1 billion against the Government of Djibouti and its partner China Merchants Port Holding remain active.
DP World’s existing arbitration awards totaling approximately $685 million against the government also remain valid and enforceable, though the government has so far refused to honour these binding awards.
The LCIA further confirmed that DP World’s 50-year concession agreement for the Doraleh terminal, signed in 2006, is legally valid and binding, and any attempt to terminate it is unlawful. Despite this, the government continues to block DP World from exercising its rights at the terminal.
PDSA was awarded costs in this specific proceeding; however, earlier LCIA rulings determined that PDSA’s previous attempts to terminate DP World’s joint venture agreement were also unlawful. As a result, PDSA still owes DP World a substantial sum.
The ruling formally closes the LCIA arbitration proceedings, but DP World’s wider dispute with the Government of Djibouti and China Merchants continues.
A DP World spokesperson stated: “Djibouti’s claims are at odds with reality, proven time and again in independent international tribunals. It is extraordinary that the government continues to spread a false narrative despite overwhelming evidence. This undermines investor confidence, damages Djibouti’s reputation, and ultimately hurts its people.”
DP World also highlighted several false claims circulated by the Djibouti government following the ruling:
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Claim: DP World’s $1 billion claim was dismissed in full.
Fact: The Tribunal dismissed only the claim against PDSA; claims against the Government of Djibouti and China Merchants remain active. -
Claim: The ruling ends the dispute.
Fact: DP World’s $685 million awards remain unpaid, and billion-dollar claims against the Government and China Merchants continue. -
Claim: The seizure of DCT was lawful.
Fact: Multiple rulings by independent tribunals have confirmed the seizure was illegal.
The Doraleh Container Terminal, East Africa’s largest and most modern port terminal, handles 1.2 million TEU annually, employs thousands directly and indirectly, and contributed around 12% to Djibouti’s GDP under DP World management.
The dispute’s origins date back to 2000, when DP World and the Government of Djibouti established a joint venture to operate the port. A 50-year concession agreement was signed in 2006, with DCT officially opening in 2009.
In 2013, Djibouti sold 23.5% of its shares to China Merchants Port Holding and built the new Doraleh Multipurpose Port, opened in 2017. In 2018, the government unilaterally terminated DP World’s concession, expelled its staff, and partnered with China Merchants, prompting DP World to initiate arbitration.
The case is widely seen as a test of the enforceability of international commercial contracts and the rule of law in global port operations. DP World has confirmed it will continue to pursue all available legal avenues to secure compensation and enforce its rights.
