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.


Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

Updated 17 October 2019

Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.