January 20, 2021/Edelman
- The government of Djibouti is seeking to (in their own words) “annul an international arbitration award” against the terms of a multi-million-dollar contract which they signed with DP World, a leading global logistics company, in 2006.
- No independent Tribunal or Court outside Djibouti—which the international contract specifies as the locales to settle disputes under the contract–has ruled in favour of Djibouti.
- Now the GoD wants to re-hear the case in a local court, which has no jurisdiction under the contract.
- According to World Bank data, Djibouti is becoming a worse place to do business, having slipped from 99th to 112th in the Ease of Doing Business Index.
- Djibouti’s President___ Guelleh’s links with China are likely to put him at odds with a White House which is expected to strongly reengage with Africa – and could open another front in the tensions in US-China relations.
- This comes as Guelleh bids for a fifth term in April.
- Djibouti’s infrastructure is vital to East Africa more widely, especially Ethiopia, therefore there’s an impact on neighbouring countries if the trade corridors aren’t moving smoothly.
- However, there are some signs that investment in alternative ports in neighbouring countries is increasing, such as Berbera in Somaliland, potentially undermining Djibouti’s position as a trade hub.
- An independent expert has estimated the economic damages to DP World from GoD’s actions at more than USD 1 billion to date.
