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
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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.


Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

Updated 11 min 13 sec ago
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Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

  • The dollar has been lifted by a stronger-than-expected US economy, the world’s largest
  • A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies

BENGALURU: Goldman Sachs said a stronger dollar is unlikely to derail its bullish view on commodities, which are likely to find support from physical shortages.
The dollar has been lifted by a stronger-than-expected US economy, the world’s largest, and that’s a positive sign for global growth, the US investment bank said.
The US dollar index has lost more than 1 percent this week, but this follows months of strong demand over US-China trade-related tensions, as investors bet the greenback would gain at the expense of riskier currencies.
“The risk aversion this summer created significant emerging market destocking, particularly in China, as consumers attempted to avoid a strong dollar and tariffs by liquidating inventories,” Goldman said in a note dated on Thursday.
A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies, making buyers and users more likely to draw on any stored materials in preference to imports.
“This liquidation, however, has a physical limit with Chinese destocking having already created significant increases in physical (premiums) for oil and metals – a sign of physical shortages.”
Going forward, oil had a strong fundamental outlook helped by US demand growth, supply losses and disruptions, and still constrained US shale output, Goldman said.
The bank said its near-term Brent crude oil price target remained at $80 a barrel.
The bank said it was moderating its bullish view for gold due to a sell-off in emerging markets, and it lowered its 12-month price forecast for the metal to $1,325 per ounce, down from $1,450 an ounce earlier.