Govt battles in London for the port of Djibouti

The government of Djibouti and two of its agencies are locked in a battle with Djiboutian businessman Abdourahman Boreh in the High Court in London over the ownership of various facilities at the country’s port.

The Port Autonome Internationale de Djibouti (PAID), now known as Port de Djibouti SA, and the Djibouti Port Free Zone Authority, together with the government, are staking a claim to assets worth $60 million, which they claim were misappropriated by Mr Boreh and three of his companies.

The case is being heard in the commercial court, which has jurisdiction to deal with complex cases arising out of national and international business disputes.

When the case began last month, the government launched 16 claims against Mr Boreh, but has since reduced them five.

The port earns the equivalent of 40 per cent of Djibouti’s GDP, but the country is not benefiting from this because it does not hold substantial shares in the facilities.

The government claims that Mr Boreh contrived to apportion himself a 30 per cent share of the Horizon Oil Terminal, while only securing a 10 per cent interest for them. The claimants said he was representing the government in the negotiations for improvements to the port.

Mr Boreh’s lawyers argue that in the late 1990s the port was run down. The need for a modern port was aocated by the International Monetary Fund.

“Mr Boreh drove the modernisation and expansion of Djibouti’s port,” his legal team said. “He invested himself, and galvanised other private investors and the government to co-operate in major privateublic sector development.

“Mr Boreh was a businessman and investor outside the government, and not a selfless civil servant divested of all interest in public-private enterprises.”

When President Ismail Guelleh came to power in 1999, his government was cash-strapped and he turned to his friend and ally Mr Boreh who had bankrolled his election campaign to look for investors.

Mr Boreh’s legal team contended: “The government did not want a larger share, because it was a high-risk project, which left its shareholders open to paying calls and losing money, and the government is not an entrepreneur.

“The government did not delegate authority to make the deal through Mr Boreh. It had its own negotiators: the president and his number two in government.”

Mr Boreh claimed in his witness statement that President Guelleh was corrupt. His allegations were that the president owned about 80 cars and a flat in Paris worth €2.24 million ($2.4 million) all on an official salary of $5,000 per month.

Mr Boreh argued in court that his personal interests were at all times known to, indeed encouraged, by President Guelleh that the president was demanding a cut of Mr Boreh’s interests that unjustified and arbitrary tax demands were used as part of a campaign against him and that the claims were politically motivated.

Lord Falconer, who is representing the government of Djibouti, had tried to stop the allegations of corruption against President Guelleh and his government from being scrutinised in court. He said that the defence was making “mushrooming allegations, which, in my respectful submission, should be kept in check.”

He said the claims “did not provide sufficient connection to a relevant issue.”