by: Simeon Kerr in Dubai and John Aglionby in Nairobi

DP World has won an arbitration case against the government of Djibouti, which claimed the Dubai ports operator made illegal payments to win a concession to operate a container terminal in the Red Sea African state.

A London tribunal ordered the government to bear legal and other costs, throwing out claims that DP World had bribed Abdourahman Boreh, the former head of Djibouti’s ports free zone authority. Despite the ruling, the Djibouti government’s attitude to the Dubai government-controlled company’s operations remains unclear. The Djibouti government said it had no comment to make on the decision.

DP World, which operates 77 terminals in 40 countries, declined to comment. The company has previously said it is keen to revive relations with the Djibouti government and maintain its presence in the country.

In 2014, the government said it had rescinded DP World’s 30-year concession at the Doraleh container terminal, Africa’s largest, when it issued arbitration proceedings alleging corruption.

But DP World, the world’s third-largest container terminal operator, continued to manage the Djibouti terminal through the court and arbitration proceedings in the absence of any legal decision to stop their operations.

The government had described various agreements between Mr Boreh and DP World, which built the terminal in 2000, as “impugned transactions”, but the tribunal ruled that none of them constituted a bribe.

“Mr Boreh did not at any stage breach his duty of probity to Djibouti,” the tribunal said, according to a copy of the judgment seen by the Financial Times. Mr Boreh, who has lived in exile since 2008, has rejected the allegations as politically-motivated attacks by President Ismail Omar Guelleh, whose family have controlled Djibouti since independence in 1977.

A London commercial court in March last year rejected civil claims brought by the government against Mr Boreh in relation to his dealings with DP World. The government’s case was damaged when it emerged that the court had been misled by some of its evidence that was incorrectly dated.

Djibouti, strategically positioned on the Horn of Africa, has become a commercial entrepot and a major military outpost. China is building its first overseas base in Doraleh. The US’s largest African military base, Camp Lemonnier, is located near the international airport. France also has a large base there. The country’s ports have also become important transshipment points, acting as the entry point for imports into Ethiopia.

As in many African states, China has become an important investment partner, funding infrastructure in the country, including the improvement of Djibouti’s original port. State-owned China Merchants Group has a stake in the Djibouti company that controls DP World’s container terminal.

SOURCE:FINANCIALTIMES