DP World to pursue legal action over disputed Djibouti port

The decision by Djibouti to nationalize the Doraleh Container Terminal came after the government scrapped a 50-year concession contract with DP World. (Reuters)
Updated 11 September 2018
0

DP World to pursue legal action over disputed Djibouti port

  • The Dubai-based firm said that nationalizing Doraleh amounted to an attempt to flout an injunction of the English High Court
  • The disputed terminal is an essential facility for supplies to neighboring landlocked Ethiopia and is located in the strategic Horn of Africa

DUBAI: Dubai’s global port operator DP World said Tuesday it will pursue all “legal means” to defend its claim to a Djibouti terminal after the African nation nationalized the facility.
The decision by Djibouti on Sunday to nationalize the Doraleh Container Terminal came after the government scrapped a 50-year concession contract with DP World, triggering a dispute between the two sides.
DP World said it has won three rulings from Britain-based courts over the matter, most recently an injunction at the High Court in London on August 31.
The Dubai-based firm said Tuesday that nationalizing Doraleh amounted to “an attempt to flout an injunction of the English High Court,” which barred Djibouti authorities from taking control over the facility.
The concession agreement between DP World and Djibouti signed in 2006 is governed by English law and through the London Court of International Arbitration, the port operator said.
The disputed terminal is an essential facility for supplies to neighboring landlocked Ethiopia and is located in the strategic Horn of Africa.
The Djibouti government had a two-thirds stake in the venture.
The terminal had been run by DP World since 2006, but in late February Djibouti canceled the contract.
Currently, Hong Kong-based China Merchants Port Holdings Company owns a 23.5-percent stake in the facility.


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

Updated 21 September 2018
0

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.