Procedural Posture

This document comprises the Respondents’ Written Submissions on Counterclaims, dated 2 July 2018, submitted in LCIA Case No. 142732. The submissions follow the Tribunal’s order of 19 February 2018 to resume the counterclaims phase after the Claimants failed to engage in settlement negotiations regarding the payment of royalties. The Respondents advance counterclaims against the Republic of Djibouti, the Djibouti Ports and Free Zone Authority (DPFZA), and Port de Djibouti S.A. (PDSA) for breaches of exclusivity rights and unpaid royalties under the 2006 Concession Agreement.

Factual and Legal Arguments

The Respondents’ primary contention is that the Claimants breached the strict exclusivity rights granted to Doraleh Container Terminal SA (DCT) under Articles 3.6.2 and 3.6.3 of the Concession Agreement. The Respondents allege that the Claimants unlawfully commissioned and developed the Doraleh Multi-Purpose Port (DMP) and the Djibouti International Container Terminal (DICT) to handle container traffic. While the Respondents had previously agreed to a narrow waiver allowing the Old Port to handle mixed cargo vessels from Ethiopian Shipping Lines and Messina Shipping Lines subject to a royalty, they argue that the Claimants deliberately misrepresented the scope of the DMP, which was built with a massive container handling capacity in direct violation of DCT’s exclusivity.

Furthermore, the Respondents assert a debt claim under Articles 7.1.1 and 7.1.2(i) of the Concession Agreement for unpaid royalties. They argue that the Claimants acknowledged their obligation to pay royalties for container traffic diverted to the Old Port after DCT commenced operations but have persistently refused to remit the amounts due.

Quantum and Relief Sought

Relying on the expert evidence of Dr. Pablo T. Spiller, the Respondents quantify their damages based on lost future revenue and profit. The Respondents seek a declaration of breach and an award of US$391.8 million in damages for the exclusivity violations related to the DMP, reserving the right to quantify damages for the DICT at a later stage. Additionally, the Respondents claim US$140.9 million for unpaid royalties concerning historical container traffic diverted to the Old Port. The submissions conclude with a request for pre-award and post-award simple interest at a rate of 10 percent, alongside a full allocation of arbitration costs and legal fees.

Procedural Posture

This document is the Third Partial Final Award issued by a London Court of International Arbitration (LCIA) Tribunal in a dispute between the Republic of Djibouti (along with the Djibouti Ports and Free Zone Authority and Port de Djibouti SA) as Claimants, and DP World Djibouti FZCO, Dubai (International) Djibouti FZE, and Doraleh Container Terminal SA (DCT) as Respondents. Following the Tribunal's dismissal of the Claimants' claims for rescission of the 2006 Concession Agreement (CA) in a prior award, this phase of the proceedings addressed the Respondents' counterclaims. The Claimants ceased participating in the arbitration prior to the hearing on these counterclaims.

Principal Legal Issues

The Tribunal was tasked with determining two primary counterclaims: first, whether the Claimants were liable for unpaid royalties under Article 7.1.2(i) of the CA for container traffic handled at the Old Port and subsequently diverted to the newly constructed Doraleh Multipurpose Port (DMP); and second, whether the Claimants breached the exclusivity provisions of the CA (Articles 3.6.2 and 3.6.3) by developing the DMP and the proposed Djibouti International Container Terminal (DICT) without the consent of DCT or offering DCT the right of first refusal.

Tribunal's Analysis and Findings

On the royalties counterclaim, the Tribunal interpreted the phrase "all the revenues" in Article 7.1.2(i) according to its natural meaning to mean gross revenues, rejecting the Claimants' prior expert position that it meant net revenues. The Tribunal found that the Respondents were entitled to unpaid royalties for container traffic handled at the Old Port and later at the DMP, calculating the owed amount based on historical tariffs and traffic volumes.

Regarding the exclusivity counterclaim, the Tribunal held that the Claimants unequivocally breached Articles 3.6.2 and 3.6.3 of the CA by proceeding with the development of the DMP and DICT in partnership with third parties without offering DCT the opportunity to develop the facilities. In assessing quantum, the Tribunal accepted the damages model presented by the Respondents' quantum expert, which calculated lost profits based on projected container traffic and applied a 10.9% weighted average cost of capital (WACC) discount rate. The Tribunal rejected the Claimants' earlier arguments that the DMP would only handle a limited volume of specific mixed cargo.

Decision and Relief

The Tribunal issued declarations that the Claimants breached the CA's exclusivity and royalty provisions. It ordered the Claimants to pay the Respondents US$ 148.8 million for unpaid royalties and US$ 385.7 million in damages for the breach of exclusivity concerning the DMP. Furthermore, the Tribunal awarded 3% simple interest on the exclusivity damages and compound interest on the unpaid royalties, while ordering the Claimants to bear the Respondents' legal fees and the costs of the arbitration.

Procedural Posture

This document is the Fourth Partial Final Award issued by a London Court of International Arbitration (LCIA) tribunal. Following the issuance of the Third Partial Final Award, which found the Republic of Djibouti liable to Doraleh Container Terminal SA for unpaid royalties, the Tribunal directed the calculation of compound interest on the principal sum of US$87,947,236.

Principal Issues and Parties' Positions

The primary issue before the Tribunal was the quantification of compound interest owed on the unpaid royalties counterclaim for the period from 2011 to 2017. The Respondents submitted calculations prepared by their expert, Dr. Pablo Spiller, determining that compound interest up to April 11, 2019, amounted to US$11,300,000. The Respondents also sought an award for the costs incurred in calculating this interest, corresponding with the Tribunal regarding corrections to the Third Partial Final Award, and defending against a stay application filed by the Claimants. The Claimants did not submit any response or participate in this phase of the proceedings.

Tribunal's Analysis and Findings

In the absence of any objection from the Claimants, the Tribunal reviewed and accepted Dr. Spiller’s calculations, noting that the interest was calculated up to April 11, 2019. Regarding costs, the Tribunal applied the general principle that costs follow the event. It reasoned that the Respondents were entitled to the costs of the interest calculation because the Claimants had proffered no payment, necessitating the exercise. Furthermore, the Tribunal found it reasonable for the Claimants to bear the costs of necessary corrections to the prior award and the costs of the Respondents' successful defense against the Claimants' stay application.

Operative Directions

The Tribunal declared that the Republic of Djibouti must pay Doraleh Container Terminal SA US$11,300,000 in compound interest for the period up to April 11, 2019, with further interest compounding at yearly rests until the principal sum is paid in full. Additionally, the Tribunal ordered the Republic of Djibouti to pay £42,029.80 for the Respondents' legal and professional fees, alongside £10,038.11 for LCIA administration charges and the Tribunal's fees.

Procedural Posture

This Order was issued by the United States District Court for the District of Columbia in the enforcement proceedings between Doraleh Container Terminal SA (DCT) and the Republic of Djibouti. The matter came before the Court upon DCT's Petition to Confirm Arbitration Awards and Djibouti's corresponding Memorandum in Opposition and Motion to Dismiss.

Decision and Operative Directives

Following a hearing on January 26, 2023, and for reasons detailed in an accompanying Memorandum Opinion, the Court granted DCT's Petition and formally confirmed the underlying arbitral awards. Specifically, the Court confirmed the Third Partial Final Award dated March 29, 2019 (as corrected on May 3, 2019) and the Fourth Partial Final Award dated July 1, 2019.

The Court entered judgment in favor of DCT and against Djibouti for the full amount of the Awards, inclusive of pre-judgment interest calculated from the respective dates of the Partial Final Awards until February 15, 2023. Furthermore, the Court directed the parties to submit a proposed final money judgment detailing the total monetary value and pre-judgment interest by February 17, 2023. The action was subsequently dismissed, subject to the submission and confirmation of the final judgment amount.

Procedural Posture

This document is a Judgment issued by the United States District Court for the District of Columbia, entering judgment in favor of the Petitioner, Doraleh Container Terminal SA, and against the Respondent, the Republic of Djibouti. The Judgment formally executes the Court's prior Order and Memorandum Opinion entered on February 15, 2023, which granted the enforcement of two underlying arbitral awards.

Operative Directions and Relief

The Court ordered the enforcement of the Third Partial Final Award (dated March 29, 2019, and corrected on May 3, 2019) and the Fourth Partial Final Award (dated July 1, 2019). Pursuant to the Third Partial Final Award, the Court entered judgment against Djibouti for $87,947,236 in unpaid royalties and $385,700,000 for breach of exclusivity under the underlying Concession Agreement. The Court further awarded $44,959,608 in simple interest on the exclusivity breach, alongside specified amounts for legal fees and tribunal administration charges, which were converted from British Pounds to United States Dollars at applicable historical exchange rates.

Pursuant to the Fourth Partial Final Award, the Court entered judgment for $11,300,000 and $10,598,246 in compound interest on the unpaid royalties, alongside additional converted sums for legal fees and tribunal administrative costs. Finally, the Court directed that post-judgment interest shall accrue on the total judgment amount pursuant to 28 U.S.C. § 1961, commencing from the date of the entry of judgment.

Procedural Posture

This Memorandum Opinion and Order, issued by the United States District Court for the District of Columbia, addresses post-judgment discovery disputes arising from efforts to enforce a $541 million arbitral award rendered against the Republic of Djibouti. Following the confirmation of the London Court of International Arbitration (LCIA) awards in favor of Doraleh Container Terminal SA (DCT), DCT served subpoenas on ten non-party banks seeking SWIFT message data to identify executable assets. Djibouti subsequently filed a motion to quash the subpoenas, while DCT cross-moved for attorneys' fees and sanctions.

Legal Issues and Parties' Positions

Djibouti argued that the subpoenas were patently overbroad, as they sought eleven years of SWIFT messages referencing 338 individuals and entities allegedly connected to the State. Furthermore, Djibouti contended that DCT's counsel lacked the requisite authority to issue the subpoenas. In response, DCT maintained that the discovery was proportional and necessary to trace assets in aid of execution, asserting that Djibouti lacked standing to challenge third-party subpoenas and that its motion was untimely.

Court's Analysis and Decision

The Court first resolved the threshold issues, finding that Djibouti possessed standing to protect its confidential financial information and that its motion to quash was timely filed before the subpoenas' return date. On the merits, however, the Court rejected Djibouti's overbreadth arguments. Applying Federal Rules of Civil Procedure 26 and 69, the Court emphasized the permissive scope of post-judgment discovery against foreign sovereigns. It concluded that the targeted SWIFT transfers—limited to transactions exceeding $25,000—were highly relevant to tracing assets related to the underlying breach of a concession agreement. The Court also dismissed Djibouti's challenge to counsel's authority, citing the law of the case established during the award confirmation proceedings.

Consequently, the Court denied Djibouti's motion to quash. The Court likewise denied DCT's cross-motion for sanctions, finding no clear and convincing evidence of bad faith by Djibouti, but cautioned the respondent against further attempts to delay post-judgment discovery.

Procedural Posture

This document is a decision by the United States Court of Appeals for the District of Columbia Circuit concerning an appeal brought by the Republic of Djibouti against a district court judgment. The district court had previously confirmed a $474 million arbitral award in favor of Doraleh Container Terminal SA (Doraleh) and denied Djibouti's motion to compel discovery regarding the authority of opposing counsel to initiate the enforcement proceedings.

Principal Legal Issues

The primary issue before the appellate court was whether a district court must verify a law firm's authority to file a petition to enforce an arbitral award under the Federal Arbitration Act and the New York Convention when the respondent presents substantial evidence challenging that authority. Specifically, Djibouti asserted that a Djiboutian court-appointed provisional administrator had expressly revoked the authority of the law firm, Quinn Emanuel, to represent Doraleh, thereby nullifying the enforcement petition.

Parties' Positions

Djibouti argued that the unauthorized filing deprived the court of an Article III case or controversy and failed to satisfy the requirement under 9 U.S.C. § 207 that a "party to the arbitration" must apply for confirmation. In response, Quinn Emanuel contended that Djibouti forfeited the authority challenge by failing to raise it during the underlying arbitration. Furthermore, the firm argued that a lack of attorney authority is not among the exclusive, enumerated grounds for refusing enforcement of an arbitral award under Article V of the New York Convention.

Tribunal's Analysis and Findings

The Court of Appeals rejected Quinn Emanuel's arguments, holding that challenges to an attorney's authority implicate fundamental principles of adversarial jurisdiction and may be raised at any stage of litigation. The court determined that traditional forfeiture rules do not apply to such challenges, as unauthorized suits constitute a nullity and jeopardize the integrity of judicial proceedings. The court further reasoned that the New York Convention does not abrogate domestic procedural rules governing attorney authorization, noting that the Federal Arbitration Act explicitly commands the application of usual federal procedural rules to enforcement petitions. Consequently, the district court erred by treating the authority challenge as forfeited and by concluding that the New York Convention precluded its consideration.

Decision and Operative Directions

The Court of Appeals vacated the district court's judgment confirming the arbitral award and remanded the matter. The district court was instructed to determine in the first instance whether Quinn Emanuel possessed the requisite actual authority to represent Doraleh in filing the enforcement petition, including resolving complex choice-of-law and corporate governance issues surrounding the provisional administrator's appointment. A dissenting opinion argued that Djibouti had forfeited the authority challenge by declining to pursue it before the arbitral tribunal.