The London Commercial Court has handed down a landmark judgment in the long-running dispute between Soprim Construction and the Republic of Djibouti, granting a final charging order over approximately $41 million held in an account linked to the Doraleh Container Terminal (DCT)—a significant step toward satisfying the African state’s outstanding $100 million obligation to the construction firm.
Mr Justice Picken delivered the ruling on July 28, marking the latest chapter in a saga that has spanned more than a decade.
Background of the Dispute
The dispute traces back to Soprim’s work as a sub-contractor in building the DCT, a strategically vital port facility located at the crossroads of the Red Sea and the Gulf of Aden, near major international shipping lanes. The terminal operates under a multi-year concession agreement governed by English law, ratified by Djibouti’s parliament in December 2006. The facility has been commercially successful, generating substantial dividends from an early stage.
However, the relationship between Soprim and Djibouti soured over time. Soprim alleged arbitrary conduct by the state, including the levying of taxes, seizure and sale of equipment, revocation of critical licences, and eventually the seizure of the terminal itself—accompanied by the ejection of personnel, cancellation of work permits, and appointment of administrators.
Arbitration and Enforcement
Soprim initiated arbitration proceedings against Djibouti—but not against DCT—under LCIA rules in July 2012. Between 2015 and 2018, the company secured arbitration awards totaling approximately $100 million. However, enforcing those awards proved to be a prolonged and difficult battle.
Investigations eventually led to a specific account held in the name of DCT at Standard Chartered Bank in London, with a balance of $41 million. Soprim applied to the Commercial Court, arguing that the funds were held on trust for the Djibouti government and were therefore subject to enforcement.
The Court’s Findings
The objecting parties denied the claim, asserting that the monies belonged to DCT and could not be considered the property of Djibouti. The court examined whether a trust under English law had been established, applying the requirements set out in the leading case of Westdeutsche v Islington: identifiable trust property, a trustee’s duty to hold property for another’s benefit, proof of a beneficiary’s proprietary interest, and enforceability against third parties.
Counsel for the objecting parties pleaded ignorance of the bank account on the part of DCT administrators, but the judge found it “inherently improbable” and “highly implausible” that the administrators knew nothing of the funds. Adverse inferences were also drawn from one administrator’s close ties to the Djibouti government, as previously admitted in Hong Kong proceedings.
“In these circumstances, it is entirely plausible that [the administrators] would have done as the [Djiboutian] President wanted; there is no other plausible inference that could be drawn,” the judge stated.
The Judgment
Setting aside a final objection regarding alleged breaches of civil procedure rules on time limits, Mr Justice Picken ultimately found that a bare trust had been created and exercised his discretion to make a charging order over the bank account.
The Parties
In the case of Soprim Construction v Republic of Djibouti & others, the defendant was unrepresented and did not appear. Essex Court Chambers’ Tim Akkouh KC, Edward Mordaunt, and Ellen Tims appeared for the claimant, instructed by Harcus Parker. Quinn Emanuel Urquhart & Sullivan UK acted for the objecting parties (DP World Djibouti and DCT), instructing Niranjan Venkatesan KC of One Essex Court and South Square’s Jamil Mustafa.
