Djibouti’s state-owned port company, Port de Djibouti SA (PDSA), has avoided financial damages in a high-stakes arbitration dispute with Dubai-based logistics giant DP World. The London Court of International Arbitration (LCIA) ruled that Djibouti’s 2018 seizure of the Doraleh Container Terminal was unlawful, reaffirming the validity of DP World’s original 50-year concession agreement signed in 2006. However, the tribunal concluded that the harm was caused by the Government of Djibouti itself, not PDSA, thereby shielding the port entity from liability in this phase of the proceedings.
This ruling marks a partial victory for PDSA, which had faced potential exposure to significant financial penalties. While the arbitration between DP World and PDSA has now concluded, the broader legal battle continues. DP World is still pursuing over $1 billion in claims against the Government of Djibouti and its Chinese partner, China Merchants Port Holdings. The company also holds binding arbitration awards totaling $685 million against Djibouti’s government, which remain unpaid despite multiple rulings in its favor.
DP World has strongly rejected Djibouti’s assertion that the dispute is resolved, calling the government’s narrative misleading and inconsistent with the facts. A company spokesperson emphasized that independent tribunals have repeatedly confirmed the illegality of the seizure and warned that Djibouti’s actions risk undermining investor confidence. During its management of the Doraleh Container Terminal, DP World’s operations contributed significantly to Djibouti’s economy, accounting for approximately 12% of the country’s GDP.
Although PDSA was awarded costs in this specific proceeding, earlier LCIA rulings had found its attempts to terminate the joint venture agreement with DP World unlawful. As a result, PDSA still owes substantial sums to the company. DP World remains committed to enforcing its rights and securing compensation through all available legal avenues. The case continues to raise important questions about the enforceability of international contracts and the consequences of unilateral government actions, with global investors closely watching its outcome.