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« Here's a plan for managing corruption risks in emerging markets | Main | Former PetroTiger chief sues Quinn Emanuel for refund after ‘astronomical’ bills »
Wednesday
Mar162016

UK courts: Djibouti government loses corruption claim against politically connected businessman

Abdourahman Mohamed Mahmoud BorehLondon’s commercial court recently dismissed, in fairly trenchant terms, a corruption-related claim brought by the Djibouti government against Abdourahman Boreh, the man credited with being instrumental in the development of the country’s strategically important and successful port, oil storage, and duty free facilities.

The case was conducted concurrently with proceedings in the London Court of International Arbitration, by which the Djibouti government is seeking on similar grounds to impugn and wrest control of those facilities from DP World (Dubai) and its operating subsidiaries.

The Djibouti government argued that the terms of various investment and infrastructure agreements were disadvantageous and had been entered into in consideration of bribes and sham agreements for consultancy payments.

In his 260-page decision, Flaux J considered that the real motivation for the litigation arose on the breakdown of the Djibouti president’s friendship with Boreh because Boreh didn't support his quest for a third presidential term. 

Thirteen of the Djibouti government’s claims were abandoned in the course of the trial, leaving only two. Those were ultimately dismissed by the judge on the grounds that the agreements were above board, that any conflicts of interest had been disclosed, and that in any event no loss could be proved.

The claim based on the alleged conflict of interest revealed that the Djibouti Law on Civil Servants, which replaced former French legislation, removed prohibitions on civil servants having private interests provided they were disclosed. The judge found that the Djibouti president was made fully aware of Abdourahman
Boreh’s potential conflicts of interest.

The case illustrates, if at some length, the need to protect infrastructure investments from the consequences of political vendettas, particularly within a close knit economic and political elite, and that the governing or applicable laws for such investments should be sufficiently nuanced to reflect local laws and operating conditions. 

*     *     *

The decision in The Republic of Djibouti et al v. Abdourahman Mohamed Mahmoud Boreh et al in the High Court of Justice, Queen's Bench Division, Commercial Court (London) is here.

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Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.

Reader Comments (1)

On what basis did the UK court have jurisdiction over this case? I looked at the decision and cannot find that issue discussed.
March 16, 2016 | Unregistered Commenteralan franklin
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