"Legal bump in the belt and road? A Mideast port giant, a Chinese rival and a Hong Kong lawsuit over a Djibouti deal"Kinling Lo
17 February 2019
A lawsuit against China’s main state-owned port builder by the Middle East’s largest port operator in the tiny African nation of Djibouti – to be thrashed out in Hong Kong’s High Court – underscores the legal risks Beijing faces in its massive global infrastructure plan, the “Belt and Road Initiative”.
DP World, a global port operator owned by the United Arab Emirates, is suing Hong Kong-based China Merchants Port Holdings (CM Port), a unit of state-owned China Merchants Group, for allegedly infringing DP World’s exclusive port agreement with Djibouti, which sits on the Horn of Africa near some of the world’s busiest shipping lanes.
According to court papers filed in August, CM Port allegedly caused the Djibouti government to revoke DP World’s exclusive right to run the country’s ports. If the case were to go to trial, it would be the first involving a Chinese belt and road project to be ruled on in the city’s courts, FactWire News Agency reported. Hong Kong’s legal jurisdiction is separated from mainland China’s under the city’s mini constitution.
“The nature of the dispute and the fact that the defendant CM Port is a leading state-owned conglomerate based in Hong Kong expanding their port business around the world, has made this case particularly interesting,” said Gu Weixia, a University of Hong Kong associate law professor.
“The case could significantly affect the investment behaviour [especially in a legal sense] of Chinese companies investing in the ‘Belt and Road Initiative’ in the future.”
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