US court has enforced a US$200 million LCIA award won by a subsidiary of the UAE’s DP World against Djibouti – having already confirmed an award in a separate arbitration over the same port facility on the Red Sea.
In a decision entered yesterday, the US District Court for the District of Columbia granted the unopposed petition to confirm the partial award issued in 2022.
DP World used Quinn Emanuel Urquhart & Sullivan in the enforcement proceedings and arbitration. Djibouti did not participate in the arbitration and was represented by Kramer Levin Naftalis & Frankel in Washington, DC.
DP World filed the proceedings in the US courts last year, seeking to enforce a third partial award issued by Australian sole arbitrator Zachary Douglas KC in its long-running dispute with Djibouti over a concession to run a container terminal at the port of Doraleh.
The 50-year concession was held by Doraleh Container Terminal (DCT), a joint venture between DP World and a Djibouti state entity. DP World was a minority shareholder but retained management rights.
DP World and DCT launched the LCIA proceedings in 2018 after the state cancelled the concession and seized control of the terminal, relying on new legislation relating to strategic infrastructure contracts. In the same year, Douglas ruled in a first partial award that the concession was binding and that the state’s seizure of the port was illegal.
In a second partial award issued in 2020, Douglas ordered Djibouti to restore the claimants’ rights within two months or pay damages. Two years later, he issued the third partial award which was the subject of the DC enforcement bid.
In the third award, Douglas ruled again that the concession agreement was valid. He found Djibouti liable for withholding shareholder dividends from DP World for the period between February 2018 and December 2020, awarding the UAE company damages of US$117 million in dividends and US$31 million in management fees. Damages beyond 2020 have not yet been decided.
The Australian arbitrator also awarded DCT US$35 million for Djibouti’s seizure of funds in a local bank account, while ordering the state to pay US$17 million in interest.
The concession has led to two other LCIA arbitrations, including a proceeding lodged by Djibouti in 2014 to rescind the agreement on corruption grounds.
Credit/Source : Globalarbitrationreview
