UK court rules to protect DP World deal in Djibouti

Djibouti authorities seized control of the Doraleh Container Terminal (DCT) port from DP World in February of this year. (AFP)
Updated 05 September 2018

UK court rules to protect DP World deal in Djibouti

  • On Feb. 22, the Djibouti authorities seized control of the Doraleh Container Terminal (DCT) port from DP World, which had been awarded the concession in 2006
  • In the run-up to the seizure, the Djibouti government had already attempted to force DP World to renegotiate the terms of the port concession

LONDON: A court in the UK has ruled in favor of Dubai ports operator DP World over a case involving a disputed shipping terminal in Djibouti.
On Feb. 22, the Djibouti authorities seized control of the Doraleh Container Terminal (DCT) port from DP World, which had been awarded the concession in 2006.
In the run-up to the seizure, the Djibouti government had already attempted to force DP World to renegotiate the terms of the port concession.
But the High Court of England and Wales has granted an injunction restraining Djibouti’s port company, Port de Djibouti S.A. (PDSA), from treating its joint venture shareholders’ agreement with DP World as terminated, according to a Dubai Government statement issued Wednesday.
The court also prohibited PDSA from removing directors of the DCT joint venture company who were appointed by DP World, the statement said.
“PDSA is not to interfere with the management of DCT until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal,” the Dubai Government statement said.
“The High Court’s order follows the unlawful attempt by PDSA to terminate the joint venture agreement with DP World and the calling of an extraordinary shareholders’ meeting on 9 September by PDSA to replace DP World-appointed directors.”
The legal ruling is the third in favor of DP World in the long-running dispute.
In August, Djibouti’s seizure of the Doraleh Container Terminal was ruled illegal by the London Court of International Arbitration.
The ruling will come as a blow to Djibouti and could potentially threaten the country’s ability to attract foreign investment in the future, analysts told Arab News at the time.
The Doraleh port has three berths and an annual capacity of 1.2 million 20-foot equivalent units of container traffic. Under the concession agreement, the Djibouti government had a
67 percent stake while DP World held 33 percent.


Oil up after drone attack on Saudi field, but OPEC report caps gains

Updated 18 min 49 sec ago

Oil up after drone attack on Saudi field, but OPEC report caps gains

LONDON: Crude oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemen’s Houthi militia and as traders looked for signs of progress in US-China trade negotiations.
Price gains were, however, capped to some degree by an unusually downbeat OPEC report that stoked concerns about growth in oil demand.
Brent crude, the international benchmark for oil prices, was up 85 cents, or about 1.4%, at $59.49 a barrel at 1225 GMT.
US West Texas Intermediate (WTI) crude futures were up $1.01, or 1.8%, at $55.88 a barrel.
A drone attack by the Iran-backed Houthi militia on an oilfield in eastern Saudi Arabia on Saturday caused a fire at a gas plant, adding to Middle East tensions, but state-run Saudi Aramco said oil production was not affected.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” said Giovanni Staunovo, oil analyst for UBS.
Iran-related tensions appeared to ease after Gibraltar released an Iranian tanker it seized in July, though Tehran warned the United States against any new attempt to seize the tanker in open seas.
Concerns about a recession also limited crude price gains.
Meanwhile, China’s announcement of key interest rate reforms over the weekend has fueled expectations of an imminent reduction in corporate borrowing costs in the struggling economy, boosting share prices on Monday.
US energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.
“WTI in recent weeks has performed relatively better than Brent... Pipeline start ups in the United States have been supportive for WTI, while the ongoing trade war has had more of an impact on Brent,” said Warren Patterson, head of commodities strategy at Dutch bank ING.
The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.
It is rare for OPEC to give a bearish forward view on the market outlook.
“Such a bearish prognosis will heap more pressure on OPEC to take further measures to support the market,” said Stephen Brennock of oil broker PVM.