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DP World Djibouti FZCO and Doraleh Container Terminal SA v. Republic of Djibouti (II), LCIA Case No. 183886

New
Short Name:

DP World and Doraleh Container Terminal v. Djibouti

Case Type:
Investment Protection Disputes, Contract (Investor–State), International Commercial Arbitration (State–Private)
Applicable Procedural Rules:
LCIA, LCIA Arbitration Rules (2014)
Seat of Arbitration:
London (United Kingdom)
Applicable Treaty:
Applicable Legal Instruments:
Economic Sector:
Construction
Outcome:
In Favour of Claimant(s)
Amount of Damages:
US $183,286,778
Other Remedy:
The Tribunal ordered Djibouti to pay DPWD USD 148.1M and DCT USD 35.1M in damages for breaches of the Concession Agreement, plus interest. All other claims were dismissed or reserved.

Available documents

28 Feb 2018
Procedural Order No. 1 (Mode of Communications)
Document Details:
PARTICIPANTS
Procedural Order No. 1 (Mode of Communications)
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
Zachary Douglas
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Bill Urquhart, Anthony Sinclair, Ted Greeno, Jagdish Menezes, Jon Cooper, Tina Kang
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
DP World Djibouti FZCO, Doraleh Container Terminal SA, Djibouti, Quinn Emanuel Urquhart & Sullivan
Document Summary
Procedural Order No. 1 (Mode of Communications)
This summary note is machine-generated. Always consult the original materials.

Procedural Background

This document is Procedural Order No. 1, issued by the Sole Arbitrator in LCIA Arbitration No. 183886, governing the mode of communications between the parties pursuant to Article 4 of the 2014 LCIA Arbitration Rules. The Claimants initiated the proceedings by dispatching their Request for Arbitration and Application for Interim Relief via international courier and email to various high-ranking officials of the Respondent, the Republic of Djibouti. This included service upon the Chairman of the Djibouti Ports and Free Zone Authority, the designated representative under the notice provisions of the underlying Concession Agreement.

Tribunal's Analysis

The Sole Arbitrator examined whether service by electronic means upon the Respondent was appropriate and effective. Relying on correspondence submitted by the Claimants, the Tribunal found conclusive evidence that the Respondent was fully apprised of the arbitration's existence. Furthermore, the Tribunal noted that the Respondent's designated representative had previously utilized his official government email address to communicate with the Claimants regarding matters arising directly from the Concession Agreement, thereby validating the use of that address for formal communications.

Operative Directions

Consequently, the Sole Arbitrator directed that, pursuant to Articles 4.1 and 4.3 of the LCIA Rules, all documents in the arbitration proceedings shall be served electronically on the Claimants' counsel and the Respondent's designated representative. The Tribunal further ordered that lengthy submissions—including pleadings, witness statements, expert reports, and annexed legal authorities—must additionally be served in hard copy via courier. The Tribunal reserved the right to revise these procedural directions should the Respondent subsequently elect to participate in the proceedings.
31 Jul 2018
First Partial Award
Document Details:
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
This summary note is machine-generated. Always consult the original materials.


10 Jan 2020
Second Partial Award
Document Details:
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
This summary note is machine-generated. Always consult the original materials.


20 Jan 2022
Third Partial Final Award
Document Details:
PARTICIPANTS
Third Partial Final Award
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Zachary Douglas
Sole Arbitrator
Zachary Douglas
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Ted Greeno, Anthony Sinclair, Jagdish Menezes
Respondent's counsel
Other counsel
Claimant's expert
Pablo T. Spiller, Carla Chavich, Jack Ghaleb
Respondent's expert
Claimant's witness
Al Banna
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Print reporter
Entities
Doraleh Container Terminal SA, DP World Djibouti FZCO, Quinn Emanuel Urquhart & Sullivan, Compass Lexecon, Senogles & Co., Djibouti, Djibouti Ports and Free Zone Authority, SGTD, Port de Djibouti
Document Summary
Third Partial Final Award
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is the Third Partial Final Award in LCIA Arbitration No. 183886, rendered by Sole Arbitrator Professor Zachary Douglas QC. The dispute arises from the 2006 Concession Agreement concerning the Doraleh container terminal. Following the Tribunal’s Second Partial Final Award, which ordered the Republic of Djibouti to specifically perform its obligations and restore the Claimants' rights, the Respondent failed to comply. Consequently, the Claimants affirmed the Concession Agreement and pursued damages for accumulated losses resulting from the Respondent's continuing repudiatory breaches. The Respondent did not participate in this quantum phase of the proceedings.

Principal Legal and Procedural Issues

The primary issues before the Tribunal concerned the quantification of damages for the period between 22 February 2018 and 31 March 2021. The Claimants sought compensation for DP World Djibouti FZCO’s (DPWD) lost management fees and dividends, as well as Doraleh Container Terminal SA’s (DCT) losses stemming from the seizure of its onshore bank account. Additionally, the Tribunal addressed DPWD’s reserved claims regarding the Respondent's liability for breaching Articles 3.7 and 12.1.3(vi) of the Concession Agreement by depriving DPWD of its economic interests and management rights.

Tribunal's Analysis and Findings

The Tribunal found that the Respondent’s actions, including the enactment of Decrees 85 and 87 and the transfer of DCT’s assets to the State-owned entity SGTD, constituted a breach of the Concession Agreement. To assess quantum, the Tribunal, assisted by its own appointed experts, rigorously scrutinized the Claimants' valuation models. The Tribunal accepted the calculation of DCT's free cash flows based on actual container traffic statistics published by SGTD, adjusted for inflation and operating costs, rejecting more speculative pricing assumptions.

The Tribunal upheld DPWD’s claims for lost management fees and dividends, confirming that these losses flowed directly from the Respondent's breaches. It also upheld DCT’s claim for the seized onshore bank account balance. However, the Tribunal dismissed DCT’s claim for lost cash flows representing dividends due to the other shareholder, Port de Djibouti S.A. (PDSA). The Tribunal reasoned that PDSA had not advanced a claim in the arbitration, and awarding such sums to DCT to be earmarked for PDSA would be fraught with practical and legal difficulties.

Operative Directions and Relief

The Tribunal ordered the Republic of Djibouti to pay DPWD USD 31,390,693 for lost management fees and USD 116,772,715 for lost dividends. Furthermore, the Respondent was ordered to pay DCT USD 35,123,370 for the loss resulting from the seizure of its onshore bank account. The Tribunal awarded pre-award and post-award compound interest on these sums at the rate of LIBOR plus 4% compounded annually. All other matters, including costs, were reserved for a subsequent award.
26 May 2023
Petition to Confirm Foreign Arbitration Award
Document Details:
PARTICIPANTS
Petition to Confirm Foreign Arbitration Award
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Claimant's counsel
Dennis H. Hranitzky, Debra O'Gorman
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United States
Print reporter
Entities
DP World Djibouti FZCO, Doraleh Container Terminal SA, Djibouti, Quinn Emanuel Urquhart & Sullivan, Djibouti Ports and Free Zones Authority, Port de Djibouti
Document Summary
Petition to Confirm Foreign Arbitration Award
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is a Petition to Confirm a Foreign Arbitration Award filed by DP World Djibouti FZCO against the Republic of Djibouti in the United States District Court for the District of Columbia. The Petitioner seeks recognition and enforcement of a Third Partial Final Award rendered on January 20, 2022, by a London-seated tribunal under the auspices of the LCIA, pursuant to the Federal Arbitration Act (FAA) and the New York Convention.

Factual and Procedural Background

The underlying dispute arises from a 2006 Concession Agreement and a Management Services Agreement for the construction and operation of the Doraleh container terminal. The Petitioner alleges that Djibouti unlawfully enacted legislation to unilaterally terminate the concession, seized physical control of the terminal, and expelled the Petitioner’s personnel. In the ensuing LCIA arbitration, the tribunal issued a Third Partial Final Award finding Djibouti liable for breaches of the Concession Agreement, specifically regarding the deprivation of management fees and dividends.

Legal Basis for Enforcement

The Petitioner asserts that the District Court possesses subject matter jurisdiction under the FAA and the Foreign Sovereign Immunities Act (FSIA). Specifically, the Petitioner argues that Djibouti waived its sovereign immunity under 28 U.S.C. § 1605(a)(1) and (6)(B) by acceding to the New York Convention and agreeing to arbitrate disputes under the LCIA Rules. The Petition further contends that the award is final and binding, and that none of the narrow grounds for refusal or deferral of recognition under Article V of the New York Convention are applicable.

Relief Sought

The Petitioner requests that the Court enter a judgment confirming the Third Partial Final Award and adjudging Djibouti liable for monetary damages. The requested relief includes $31,390,693 for lost management fees, $116,772,715 for lost dividends, and corresponding pre-award and post-award interest compounded annually at the rate of LIBOR plus 4%.
5 Jul 2024
Report and Recommendation of the United States District Court for the District of Columbia
Document Details:
PARTICIPANTS
Report and Recommendation of the United States District Court for the District of Columbia
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Zia M. Faruqui
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United States
Print reporter
Entities
Djibouti, DP World Djibouti FZCO, Doraleh Container Terminal SA
Document Summary
Report and Recommendation of the United States District Court for the District of Columbia
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is a Report and Recommendation issued by a United States Magistrate Judge in the U.S. District Court for the District of Columbia. It addresses an unopposed petition filed by DP World Djibouti FZCO to recognize and enforce a foreign arbitral award against the Republic of Djibouti. The underlying arbitration was conducted under the rules of the London Centre for International Arbitration (LCIA), culminating in a Third Partial Final Award issued on January 20, 2022, in favor of the petitioner.

Jurisdictional Analysis

The court conducted a mandatory examination of its subject matter jurisdiction under Chapter 2 of the Federal Arbitration Act, which codifies the 1958 New York Convention. The Magistrate Judge determined that the arbitral award arose from a commercial legal relationship—specifically a concession agreement for a container terminal facility—thereby falling squarely within the Convention's purview. Furthermore, the court found that Djibouti had waived its sovereign immunity under the Foreign Sovereign Immunities Act (FSIA) by acceding to the New York Convention and expressly agreeing to arbitrate disputes under the LCIA Rules.

Recommendation and Dispositive Relief

Noting the extremely limited scope of judicial review for arbitral awards and the respondent's formal Statement of Non-Opposition, the Magistrate Judge recommended granting the petition. The court advised that judgment be entered in favor of the petitioner for the calculated damages, which included lost management fees, lost dividends, and compounded interest, totaling approximately $189.9 million. The parties were further advised of their right to file written objections to the Report and Recommendation within fourteen days.
23 Jul 2024
Order of the United States District Court for the District of Columbia
Document Details:
PARTICIPANTS
Order of the United States District Court for the District of Columbia
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Colleen Kollar-Kotelly, Zia M. Faruqui
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United States
Print reporter
Entities
Djibouti, DP World Djibouti FZCO, Doraleh Container Terminal SA
Document Summary
Order of the United States District Court for the District of Columbia
This summary note is machine-generated. Always consult the original materials.

This document is an Order issued by the United States District Court for the District of Columbia, adopting a Magistrate Judge's Report and Recommendation to confirm a foreign arbitral award in the enforcement proceedings between DP World Djibouti FZCO and the Republic of Djibouti.

The procedural posture centers on the Magistrate Judge's earlier Report and Recommendation, issued on July 5, 2024, which advised the parties of their right to file written objections within fourteen days pursuant to Local Civil Rule 72.3(b). The Court noted that failure to file timely objections could result in a waiver of the right to appeal an order adopting the findings. Upon reviewing the docket, the District Court observed that the fourteen-day statutory deadline had lapsed without any objections being filed by either party.

In the absence of any objections, the District Court adopted the Magistrate Judge's Report and Recommendation in its entirety for the reasons stated therein. Consequently, the Court issued a dispositive ruling granting the Petitioner's Petition to Confirm the Foreign Arbitration Award.
23 Jul 2024
Judgment of the United States District Court for the District of Columbia
Document Details:
PARTICIPANTS
Judgment of the United States District Court for the District of Columbia
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Colleen Kollar-Kotelly
Claimant's counsel
Respondent's counsel
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United States
Print reporter
Entities
Djibouti, DP World Djibouti FZCO, Doraleh Container Terminal SA
Document Summary
Judgment of the United States District Court for the District of Columbia
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is a Final Judgment issued by the United States District Court for the District of Columbia, granting Petitioner DP World Djibouti FZCO's Petition to Confirm a Foreign Arbitration Award against Respondent, the Republic of Djibouti.

Decision and Relief Granted

The Court entered judgment in favor of the Petitioner in the total amount of $194,275,379.94, enforcing the damages awarded in the underlying Third Partial Final Award dated January 20, 2022. The dispositive sum comprises $31,390,693 for lost management fees and $116,772,715 for lost dividends pursuant to the underlying Concession Agreement.

In addition to the principal damages, the Court awarded substantial accrued interest on both the lost management fees and lost dividends. The judgment specifies the application of 12-month USD LIBOR and 180-day SOFR benchmark rates, plus a four percent margin compounded annually, alongside precise per diem accrual rates continuing through July 31, 2024.
27 Feb 2026
Judgment of the High Court of Justice of England and Wales
Document Details:
PARTICIPANTS
Judgment of the High Court of Justice of England and Wales
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Waksman
Claimant's counsel
Tim Akkouh, Edward Mordaunt
Respondent's counsel
Niranjan Venkatesan, Jamil Mustafa
Other counsel
Claimant's expert
Respondent's expert
Claimant's witness
Respondent's witness
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United Kingdom
Print reporter
Entities
Soprim Construction SARL, Djibouti, DP World Djibouti, Doraleh Container Terminal, Harcus Parker, Quinn Emanuel Urquhart & Sullivan
Document Summary
Judgment of the High Court of Justice of England and Wales
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

This document is a judgment rendered by the High Court of Justice of England and Wales (Commercial Court) concerning an application for security for costs. The application was brought by DP World Djibouti (DPW), acting as the First Objecting Party and Additional Respondent, against the Claimant, Soprim Construction. The underlying proceedings involve Soprim's efforts to enforce arbitral awards against the Republic of Djibouti by seeking a final charging order (FCO) over funds held in London by Doraleh Container Terminal (DCT), which Soprim alleges are beneficially owned by Djibouti.

Principal Legal Issues

The primary legal issue before the Court was whether DPW qualified as a "defendant" within the meaning of Civil Procedure Rule (CPR) 25.26, thereby granting the Court jurisdiction to order security for costs against the Claimant. The analysis required the Court to determine whether an intervening party, joined to protect its own economic and contractual interests in the assets targeted by a charging order, assumes the substantive status of a defendant for the purposes of the rule.

Parties' Positions

DPW contended that the Court should look to the substance rather than the form of the proceedings. It argued that it was compelled to oppose the FCO to protect its contractual rights and its share of unpaid dividends held in the targeted bank accounts, effectively placing it in a defensive posture akin to a defendant. Soprim conceded that it was resident abroad and impecunious but maintained that DPW was not a defendant to its claim, meaning the jurisdictional gateway for security for costs under CPR 25.26 was not met.

Court's Analysis and Findings

Mr Justice Waksman conducted a detailed review of the jurisprudence surrounding the definition of a "defendant" for security for costs. The Court emphasized that while substance prevails over form, the mere fact that an interested party joins proceedings to protect its interests does not automatically render it a defendant. The Court found that the true target of Soprim's enforcement action was the Republic of Djibouti, not DPW. DPW's assets were not under direct attack; rather, DPW intervened as a competing creditor and shareholder seeking to preserve the funds for its own putative claims against DCT. Consequently, the Court determined that DPW's role was not "simply defensive" against a direct claim, and it could not be characterized as a defendant under CPR 25.26.

Decision

Having concluded that DPW was not a "defendant" for the purposes of the application, the Court held that it lacked jurisdiction to order security for costs. The Court further noted obiter that, even if jurisdiction existed, it would have declined to exercise its discretion to award security. DPW's application for security for costs was accordingly dismissed.
24 Jul 2026
Judgment of the High Court of Justice of England and Wales
Document Details:
PARTICIPANTS
Judgment of the High Court of Justice of England and Wales
Participants listed are for this document only and may not include all participants involved in the entire case. Always consult the original documents.
Claimant appointee
Respondent appointee
Tribunal/Panel chair
Arbitrator(s)
Sole Arbitrator
ICSID Annulment Committee president
ICSID Annulment Committee members
WTO Appellate Body members
WTO Appellate Body chair
Judges
Picken
Claimant's counsel
Tim Akkouh, Edward Mordaunt, Ellen Tims
Respondent's counsel
Niranjan Venkatesan, Jamil Mustafa
Other counsel
Claimant's expert
d'Avout, Genet
Respondent's expert
Garaud
Claimant's witness
Abdourahman Boreh
Respondent's witness
Suhail Al Banna
Other witnesses
Tribunal secretary
Tribunal assistant
Country
Country in which this occurs:
United Kingdom
Print reporter
Entities
Doraleh Container Terminal SA, Soprim Construction SARL, DP World Djibouti FZCO, Djibouti, Harcus Parker, Quinn Emanuel Urquhart & Sullivan, DP World Djibouti, Doraleh Container Terminal, Societe de Gestion du Terminal a Conteneur de Doraleh, Port de Djibouti
Document Summary
Judgment of the High Court of Justice of England and Wales
This summary note is machine-generated. Always consult the original materials.

Procedural Posture

The English High Court of Justice (Commercial Court) considered applications by Soprim Construction SARL (Claimant) to enforce arbitral awards against the Republic of Djibouti (Defendant) via a final charging order over funds held in London bank accounts in the name of Doraleh Container Terminal SA (DCT). The Objecting Parties, DP World Djibouti and DCT, opposed the charging order and applied to set aside the arbitration claim form.

Principal Legal Issues

The principal issues included: (i) whether the funds in the Standard Chartered Bank (SCB) accounts were held on bare trust for Djibouti under English law; (ii) whether the Djiboutian court judgments appointing administrators and liquidators over DCT should be recognized in England, or refused on public policy or natural justice grounds; (iii) whether the court should exercise its discretion to grant a final charging order; and (iv) whether the arbitration claim form was validly served.

Parties' Positions

Soprim argued that Djibouti exercised complete control over DCT and its administrators, creating a bare trust over the SCB accounts, and that the charging order should be made final. The Objecting Parties contended that the administrators lacked authority, asserting that their appointments breached English anti-suit injunctions and arbitration agreements, and were procured through improper influence. They further disputed the existence of a trust and opposed the charging order on discretionary grounds.

Court's Analysis and Findings

Mr Justice Picken determined that the SCB accounts were situated in England, making English law the applicable law of the alleged trust. The court inferred from the factual matrix—including Djibouti's systemic control over DCT and the administrators' actions aligning entirely with the State's interests—that an agreement existed whereby DCT held the funds on bare trust for Djibouti. The court rejected the Objecting Parties' arguments against recognizing the Djiboutian judgments, finding no direct breach of the English injunctions by the relevant parties. Furthermore, the court held there was insufficient specific evidence that the Djiboutian court decisions appointing the administrators were perverse or breached natural justice. The court also dismissed the set-aside application regarding service of the claim form, confirming it was served within the applicable time limits.

Operative Directions

The court granted Soprim's application for a final charging order over the entirety of the amounts contained in the SCB accounts. The court rejected alternative applications for a third-party debt order and a receivership order, and dismissed the Objecting Parties' set-aside application.
Case Summary
This summary note is machine-generated. Always consult the original materials.

Case Overview

In DP World and Doraleh Container Terminal v. Djibouti, the Claimants, Doraleh Container Terminal SA (DCT) and DP World Djibouti FZCO (DPWD), initiated arbitration under the LCIA Rules against the Republic of Djibouti. The dispute centers on Djibouti's alleged breaches of a 2006 Concession Agreement for the development and operation of the Doraleh Container Terminal, a major regional shipping hub.

Procedural History

The arbitration has produced a series of awards. A First Partial Final Award affirmed the validity and binding nature of the 2006 Concession Agreement. A Second Partial Final Award, issued on January 10, 2020, found that Djibouti had breached numerous obligations under the agreement. The tribunal ordered specific performance, requiring Djibouti to restore the Claimants' rights and benefits under the contract within two months. Djibouti failed to comply with this order. Consequently, the Claimants affirmed the ongoing validity of the contract and sought damages for accumulated losses. This Third Partial Final Award, dated January 20, 2022, addresses the quantum of damages for the period from February 22, 2018, to March 31, 2021. The Republic of Djibouti did not participate in this phase of the proceedings.

Key Issues and Positions

Claimants' Position on Damages

Following Djibouti's non-compliance with the specific performance order, the Claimants sought damages for losses incurred due to the ongoing breaches. Their claims, adjudicated in this award, included: (1) lost management fees payable to DPWD; (2) lost dividends payable to DPWD as a shareholder of DCT; and (3) compensation for the seizure of DCT's onshore bank account by Djibouti. The Claimants' quantum methodology was based on a counterfactual scenario of what DCT's financial performance would have been had the contract been honored, using actual container traffic data from the new state-owned operator to avoid speculation.

Respondent's Position

The Republic of Djibouti did not participate in the proceedings leading to this award. As such, it did not present any defense, counter-arguments, or alternative quantum calculations.

Tribunal/Court Reasoning and Holdings

Liability for Reserved Claims

The Tribunal first addressed claims that had been reserved in the Second Award, particularly DPWD's claim for lost dividends. It held that Djibouti's actions—including interfering with DCT's corporate affairs, appointing an administrator, and blocking dividend payments—were part of a single course of conduct designed to eviscerate DPWD's rights. The Tribunal found these actions constituted a clear breach of Articles 3.7 and 12.1.3(vi) of the Concession Agreement, which protected DPWD's economic interests and its freedom to conduct commercial activities as a shareholder.

Quantum/Damages

Assisted by its own appointed experts, the sole arbitrator, Zachary Douglas, assessed damages based on a detailed calculation of DCT's counterfactual free cash flows. The Tribunal accepted the Claimants' approach of using actual terminal performance data under the new operator. It awarded DPWD USD 31,390,693 for lost management fees and USD 116,772,715 for lost dividends for the specified period. The Tribunal also awarded DCT USD 35,123,370 for the seizure of its onshore bank account, representing the excess cash that would have accumulated but for Djibouti's actions. However, a related claim by DCT for lost dividends on behalf of its other shareholder, Port de Djibouti S.A. (PDSA), was dismissed. The Tribunal reasoned that PDSA had not brought a claim itself, and DCT could not act as a mere conduit to recover funds for another party, particularly when such a claim would face significant legal hurdles.

Interest

The Claimants requested pre- and post-award interest at a rate of 12.2%, reflecting their estimated cost of capital. The Tribunal rejected this rate, deeming it not a fair compensatory measure in the prevailing low global interest rate environment. Instead, it exercised its authority under the LCIA Rules and the UK Arbitration Act 1996 to award interest at a rate of LIBOR plus 4%, compounded annually. The Tribunal noted this rate was stipulated in the Concession Agreement for delayed termination compensation and considered it a strong indicator of the parties' agreed-upon rate for compensating the time value of money.

Disposition / Relief

The Tribunal declared that the Republic of Djibouti breached the 2006 Concession Agreement. It ordered Djibouti to pay DPWD a principal amount of USD 148,163,408 (for lost management fees and dividends) and to pay DCT a principal amount of USD 35,123,370 (for its seized bank account). The award also quantified the pre-award interest due on these amounts as of the date of the award (USD 1,775,755 on management fees, USD 14,655,792 on dividends, and USD 1,034,658 on the bank balance). Post-award interest was ordered to accrue on the principal amounts at LIBOR plus 4% compounded annually until payment. DCT's claim for lost dividends due to PDSA was dismissed, and all other matters, including costs, were reserved.