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November 2012: Important International Arbitration Victory for DP World

November 2012

The firm recently achieved a significant victory through a favorable settlement for client Dubai Ports World (“DPW”) in a dispute involving an investment treaty arbitration and two contract arbitrations with the Republic of Yemen and the state-owned Yemen Gulf of Aden Ports Corporation (“YGAPC”). The U.A.E.-based port operator entered into a joint venture with YGAPC and concluded a series of agreements to develop, manage and operate two container terminals in Aden, Yemen. Various disputes arose between the parties in relation to their port agreements and Yemen’s obligations to DPW pursuant to the bilateral investment treaty between the Republic of Yemen and the U.A.E. (“Yemen/U.A.E. BIT”). Quinn Emanuel assisted DPW with developing its contract and treaty claims against Yemen and YGAPC, and then negotiated an optimal settlement whereby the world-class port operator divested its entire ownership interests in the troubled venture and recouped a lump sum payment of approximately eighty percent of the value of its claims.

To achieve this result, Quinn Emanuel’s international arbitration team, working seamlessly across multiple time zones, employed a winning strategy that took the offensive and put the Republic of Yemen on notice of its violations to DPW under the Yemen/U.A.E. BIT. Our team also fashioned compelling arguments and counterclaims when Yemen responded to the BIT dispute notice by terminating the project agreements and threatening to file two separate contract arbitrations pursuant to LCIA and UNCITRAL rules.

The parties agreed to a global settlement of all claims under the BIT and project agreements. Under the settlement agreement, DPW also ceased its management of Aden Container Terminal on September 20th, 2012, when the Aden Port Development Company, a wholly owned subsidiary of YGAPC, took full responsibility of the port’s operations.

The global settlement was seen favorably by both parties. YGAPC stated that it was “pleased” to have reached the agreement on an amicable basis and that the agreement “protects the interests of the Republic of Yemen and YGAPC and secures the future for this strategically located terminal.” DPW observed that it was “very satisfied” with the agreement and that its “investment in the Aden facility was recognized by [its] joint venture partner, YGAPC, through the agreement reached[.]”