© Hyotographics

The republic of Djibouti is running up a significant legal bill; DP World has won another court ruling in its case against the country and port operator China Merchants Port Holdings.

Hong Kong’s court of appeal dismissed a request by China Merchants for a second appeal that the case be heard in Djibouti and ordered the port operator to pay legal costs for the action.

DP World and joint-venture Doraleh Container Terminal are bringing claims against China Merchants, arguing that it induced the government of Djibouti to expel DP World, with its exclusivity rights, and hand over the Doraleh terminal to the Chinese company.

In January, the London Court of International Arbitration also ruled in DP World’s favour, awarding it damages of $200m from Djibouti for the period between 23 February 2018 to 31 December 2020. Total damages now owed to DP World are some $686.5m, plus accruing interest.

The Doraleh Container Terminal is the largest employer and biggest source of revenue in Djibouti and has operated at a profit every year since it opened.

In 2019, Djibouti was ordered to pay some $500m to DP World for breaking its ‘exclusivity’ clause and for the non-payment of royalties.

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