The Government of Djibouti has terminated its contract with Dubai Ports World (DP World) for the operation of Doraleh Container Terminal.

The terminal is situated at the Port of Doraleh in Djibouti.

It was originally designed and built by a unit of DP World, which is backed by the Government of Dubai.

The DP World unit has been operating the terminal since 2006 under a 50-year concession agreement that was awarded by the Djibouti Government, reported Associated Press.

"DP World has commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation."

The Government of Dubai has accused the Djibouti Government of illegally seizing control of Doraleh Container Terminal after the abrupt cancellation of the concession arrangement.

In a statement, the Government of Dubai said: “The illegal seizure of the terminal is the culmination the government’s campaign to force the DP World to renegotiate the terms of the concession.

“Those terms were found to be ‘fair and reasonable’ by a London Court of International Arbitration tribunal led by Lord Leonard Hoffman and Sir Richard Aikens, both highly respected former English jurists.

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“DP World has commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.”

DP World and the Government of Djibouti have been engaged in a dispute over the control of Doraleh Container Terminal since 2014.

The dispute initially emerged in 2014 when Djibouti claimed that DP World had bribed the head of the country’s port and free zone authority, Abdourahman Boreh, to secure a commission to operate the terminal, reported alarabiya.net.