Court orders Djibouti pay $385m to DP World venture

Djiboutian youths perform a traditional dance at the outset of DP World’s involvement at the Doraleh container terminal, in 2009. (Reuters)
Updated 04 April 2019

Court orders Djibouti pay $385m to DP World venture

  • A London court ordered the government of Djibouti to pay Doraleh Container Terminal (DCT) $385 million plus interest for breach of its exclusivity over port operations
  • The terminal had been run by DP World, but Djibouti unilaterally canceled the contract

LONDON: An international court has ordered Djibouti to pay compensation to a venture part-owned by Dubai-based global ports operator DP World over breach of contract, the UAE government said on Thursday.
The London Court of International Arbitration ordered the government of Djibouti pay Doraleh Container Terminal (DCT) $385 million plus interest for breach of its exclusivity over port operations in Djibouti.
The Djibouti port operator DCT is 33.34 percent owned by DP World, and 66.66 percent by Port de Djibouti, an entity of the Republic of Djibouti.
The tribunal found that by developing new container port opportunities with China Merchants Holdings International Co., a Hong-Kong-based port operator, Djibouti breached DCT’s rights under a 2006 concession agreement to develop a container terminal at Doraleh, in Djibouti.
The terminal had been run by DP World, but Djibouti unilaterally canceled the contract. Under the 2006 agreement DCT had exclusivity over all container handling facilities in the territory of Djibouti.
Further damages are possible if Djibouti develops a planned Doraleh International Container Terminal, DICT, with any other operator without the consent of DP World, according to UAE state news agency WAM.
China Merchants also operates a $3.5 billion free trade zone it developed under an agreement with Djibouti, which the UAE government said was subject of other litigation proceedings.
The tribunal also ordered Djibouti to pay DCT $148 million for historic non-payment of royalties for container traffic not transferred to DCT once it became operational, WAM reported. Djibouti is also ordered to pay DCT’s legal costs.
The London tribunal, which follows four other substantial rulings in DP World’s favor, recognized that the 2006 concession agreement remains valid and binding.


Gulf Marine CEO quits after review sparks profit warning

Updated 22 August 2019

Gulf Marine CEO quits after review sparks profit warning

  • Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence

DUBAI: Gulf Marine Services said on Wednesday Chief Executive Officer Duncan Anderson has resigned as the oilfield industry contractor warned a reassessment of its ships and contracts showed profit would fall this year, kicking its shares 12 percent down.

The Abu Dhabi-based offshore services specialist said a review by new finance chief Stephen Kersley of its large E-class vessels operating in Northwest Europe and the Middle East pointed to 2019 core earnings of between $45 million and $48 million, below $58 million that it reported last year.

A source familiar with the matter told Reuters that Anderson, who has served as CEO for 12 years, was asked to step down. Anderson could not be reached for comment.

The company, which in the past predominantly operated in the UAE, expanded operations and deployed large vessels in the North Sea and Saudi Arabia nine years ago and listed its shares in London in 2014.

Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence.

The North Sea has seen a revival in production in recent years due to new fields coming on line and improved performance by operators following the 2014 oil price collapse.

Still, the basin’s production is expected to decline over the next decade, according to Britain’s Oil and Gas Authority.

“(The CFO’s) review has coincided with a pause in renewables-related self-propelled self-elevating support vessels activity in the North Sea, which will impact several of the higher day-rate E-Class vessels,” Investec wrote in a note.

Gulf Marine appointed industry veteran Kersley as chief financial officer in late May as it sought to halt a slide which has seen the company’s shares fall nearly 80 percent last year and another 23 percent so far this year.

The company said market conditions remained challenging and that it was still in talks with its financial advisors regarding a new capital structure.

“Management, the new board and the group’s advisors, have been in negotiation with the group’s banks on resetting its capital structure and progress has been made,” it said in a statement.

Last year, Gulf Marine said contracts were delayed into 2019 as the company was seen to be in breach of certain banking covenants at the end of 2018.

The company said it was still in talks with its banks and individual lenders with hopes of getting a waiver or an agreement to amend the concerned covenants.