Somaliland: It’s Back to Court for DP World as Rows Continue in Two, or is it Three or Four? Countries

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Somalilandsun- UAE – SOMALIA – DJIBOUTI – DP World’s headache in East Africa shows no signs of abating with the disagreements between Somalia and Somaliland continuing over the Government of Ethiopia’s decision to purchase a 19% share in the Port of Berbera. DP World has now apparently been banned from operating anywhere in Somalia. Confusion over the contract boils down basically to the lack of recognition of the semi-autonomous region of Somaliland. Elsewhere, the government of Djibouti has revealed its new ambitions for the DP World’s former operation in the Doraleh Container Terminal which it recently seized, as the port and logistics giant looks to once again settle the matter in Court.
At the beginning of March, DP World announced a tripartite agreement with Ethiopia taking a 19% stake in the Port of Berbera where DP World would have a controlling 51% share and Somaliland the remaining 30%. Somalia took issue with the decision, declaring it to be ‘null and void’. On March 12, the Federal Parliament of Somalia voted unanimously to ban DP World from operating in Somalia and nullify the tripartite agreement.

Somaliland, which in 1991 declared independence from the rest of Somalia but remains unrecognised by the larger international community, insists that the Mogadishu-based government has nothing to do with the agreement with DP World, and on March 13, voted once again to approve the deal between the two over the port group’s investment. Somaliland Parliament, in turn, denounced Somalia’s decision to nullify the agreement with Ethiopia, calling the move ‘belligerent and illegal’.

Separately, just north of the Port of Berbera operations, the Doraleh Container Terminal (DCT), now under the control of Djiboutian government owned Société de Gestion du Terminal à Conteneurs de Doraleh (SGTD), has reaffirmed its strategic wish to preserve and develop container terminal activities at the facility, expanding its transhipment business taking full advantage of its location in the Horn of Africa.

Djibouti seized control of the terminal from DP World claiming that the UAE operated facility used aggressive tactics such as deliberately slowing the development of the DCT in favour of DP World’s flagship, Jebel Ali, with DP World saying that the action from Djibouti was a reaction to it losing an arbitration case centred on allegations of illegal payment by the UAE group to secure the 30-year concession to operate the facility. DP World has since begun new legal proceedings before the London Court of Arbitration over the seizure.

Analysis from the Arab Gulf States Institute in Washington (AGSIW), an independent, non-profit institution dedicated to increasing the understanding and appreciation of Gulf Arab states, outlines the situation surrounding DP Worlds relationship with East Africa in an AGSIW article by an independent journalist, Taimur Khan, which highlights Djibouti’s deteriorating bilateral ties with the United Arab Emirates and goes into minute detail regarding the progressing political situation in the region as he sees it.

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