DP World has sued a Chinese state enterprise in Hong Kong for infringing its exclusive port agreement with Djibouti.
The legal filing by DP World at the Hong Kong High Court against China Merchants Port Holdings Company states that the company caused the Djibouti government to revoke the firm’s exclusive right to run the country’s ports.
“In the writ of summons filed to the Hong Kong court in August last year, DP World accused the company for causing the Djibouti government to nationalise the Doraleh Container Terminal, despite the 30-year concession agreement that allowed DP World to exclusively run the terminal,” Factwire stated in a report.
The concession agreement also said Djiboutian authorities cannot grant concessions for any other port capable of handling ocean-going vessels or free zone facilities within the country for the duration of the agreement, the report said.
The concession agreement took effect in February 2004 for a period of 30 years with the option for two 10-year renewals.