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DUBAI: September 05, 2018. The Dubai government has been granted an injunction by an English High Court to stop Djibouti’s port company, Port de Djibouti S.A. (PDSA), from terminating its joint venture agreement with DP World and its management of the Doraleh Container Terminal (DCT).

PDSA is majority-owned by the government of Djibouti and its CEO is the chairman of the Ports & Free Zones Authority of Djibouti. Hong Kong-based China Merchants is a minority shareholder in PDSA.

Djibouti port board meeting Jan 2018According to the government of Dubai, owner of DP World, If PDSA ignores the Court’s order and tries to replace DP World-nominated directors of the DCT at a September 09 shareholders meeting, it could face a fine or the seizure of its assets and its officers and directors imprisoned.

This is the third legal ruling in favour of DP World following two previous decisions from the London Court of International Arbitration (LCIA). On each occasion, DP World has been recognised as having legal management control of the DCT joint venture, even though the PDSA is the majority shareholder.

The latest Court ruling says PDSA cannot act as if the joint venture has been terminated; cannot appoint new directors or remove DP World’s nominated directors without its consent; and cannot instruct, or cause DCT to instruct, Standard Chartered Bank in London to transfer funds to Djibouti.

With another hearing set for September 14 when PDSA is expected to respond to the Court order, DP World has notifed Standard Chartered Bank and China Merchants to ignore any instructions from Djibouti to transfer funds after the September 09 meeting.

Meanwhile a report from London-based risk analyst EXX Africa suggests the takeover of the DCT by the Djibouti government could allow it to be used as a processing center for regional arms trafficking.

With much of the country’s recent economic success due to DP World’s management of the DCT and landlocked neighbour Ethiopia’s decision to use Djibouti as its main gateway, EXX Africa says a key concern is who controls the country’s ports in future and what effect the growing illegal arms trade in the Horn of Africa will have on its political stability.

(M.Saad Omar Gueller, Port of Djibouti general manager, is pictured third from the left in the blue suit.)

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