Horndiplomat-Press release from the Government of the Republic of Djibouti .Horndiplomat reports
DJIBOUTI DOES NOT RECOGNISE THE SENTENCE GIVEN BY THE LONDONCOURT OF INTERNATIONAL ARBITRATION
• The Government of the Republic of Djibouti reaffirms that the concession agreement contained severe irregularities and threatened the national interest and sovereignty of Djibouti.
•The Republic of Djibouti and the Djibouti Ports and Free Zones Authority have repeatedly tried to negotiate a fair compensation with DP World. We are now more convinced than ever that a compensatory settlement is the only option in line with international law.
Djibouti, 3 August 2018 – On 22 February 2018, earlier than intended, the Republic of Djibouti terminated the concession of the container terminal at Doraleh.
The concession had been given in 2006 to Doraleh Container Terminal (DCT), a company controlled de facto by the minority shareholder, DP World.
The implementation of the concession contract was shown to be contrary to the fundamental interests of the Republic of Djibouti.
The continuation of this contract would have seriously harmed the vitally important development of the country, and limited control of its most strategic infrastructure.
The termination of the contract conforms to international law Several renegotiation attempts of the concession with DP World, initiated by the Government of Djibouti, were unsuccessful due to DP World’s repeated refusal to listen to the legitimate demands of the State of Djibouti.
The termination of the concession contract conforms to international public law and is both necessary and inevitable.
International law recognises the ability of a sovereign nation to unilaterally cancel a concession contract on the grounds of public interest, subject to the payment of fair compensation to the other party.
The termination procedure was also carried out in a transparent manner. Its legal basis is grounded in a law enacted by the Djiboutian Parliament on 8 November 2017, aimed at protecting the fundamental interests of the nation, and reinforced by a decree of 22 February 2018.
DCT, under the instructions of DP World, nevertheless decided to challenge the cancellation and initiated an arbitration procedure in the London Court of International Arbitration (LCIA).
As publicly announced by DP World, the arbitration procedure aimed to take back DP World’s rights on the concession as soon as possible,and therefore the management of Doraleh Container Terminal.
The Republic of Djibouti did not participate in the arbitration procedure The Republic of Djibouti did not participate in this procedure, assuming that LCIA would judge this vital litigation based only on the legal provisions of a contract which contradicts the fundamental interests of our country.
The Government of the Republic of Djibouti has taken note of the biased sentence declared by the arbitrator, appointed under the auspices of the LCIA, on 31 July 2018.
The arbitrator came to the conclusion that the concession contract could not be terminated by the Government of the Republic of Djibouti under the law of the 8 November 2017, and therefore deduced that the contract was still legally binding.
The Republic of Djibouti does not accept this sentence which has ruled that the law of a sovereign state cannot be enforced by that State.
The decision seems to find that the legal provisions of the concession contract between the Port of Djibouti and DCT are above Djiboutian law. This decision disregards the sovereignty of the Republic of Djibouti and takes no account of the rule of international law.
Following the arbitrator’s reasoning, a sovereign state would not have the right to terminate a contract considered to be working against its fundamental interests, whilst the co-contractor (DP World) would retain the authority to cancel the contract to protect its commercial interests.
In other words, a contract would have more value than a law which had been voted for on behalf of a sovereign people.
A fair compensatory settlement is the only option, in line with international law
In addition, DP World’s approach, which consists in trying to oppose the will of a sovereign nation, is unrealistic and destined to fail. The concession contract has been terminated and the staff and the assets of the concession have been transferred to a public company, created specifically for this purpose, which now manages the infrastructure.
That is why, in this matter, a fair compensatory settlement is the only option which is in line with the principles of international law.
By:Press office of the Presidency of Djibouti