UK's High Court Approves DP World Deal

by Robin Pilgrim, LawAndTax-News.com, London

06 March 2006

It emerged last week that despite the ongoing debate on the matter in the United States, DP World's takeover of the UK's P&O has been cleared by the UK's High Court, at least.

Ruling on Thursday, Justice Nicholas Warren dismissed an appeal against the acquisition lodged by Eller & Co, which jointly runs operations with P&O in Miami.

According to The Times, which reported on the matter, Mr Justice Warren argued that P&O and DP World's attempts to address security concerns had been "responsible and proportionate".

Whilst he denied Eller permission to appeal, a 24 hour stay was put on the ruling in order to allow it to be challenged.

Eller is also seeking to block the transaction via the Florida courts, and argued that the decision will "decimate" its operations if security concerns cause port authorities to cancel terminal leases.

Late last month, DP World offered to submit its takeover of P&O to additional scrutiny in the form of a second US review of potential national security concerns.

The firm had announced that it would ring-fence P&O's US operations as part of its takeover of the UK firm, at least until concerns expressed by US lawmakers regarding the deal had been addressed.

During the 45 day second review of its plans, a UK citizen will be placed in charge of its US operations in Baltimore, New Jersey, New Orleans, New York, Miami and Philadelphia.

"We hope that voluntarily agreeing to further scrutiny demonstrates our commitment to our long-standing relationship with the United States," chief operating officer Edward Bilkey told the Associated Press.

The Committee on Foreign Investment in the United States (CFIUS) published a statement welcoming the announcement.

"Upon receipt of the new notification, CFIUS will promptly initiate the review process and fulfill DPW's request for a full investigation," it explained, continuing:

"Over a nearly three-month period starting in October 2005, representatives of the 12 departments and agencies that comprise CFIUS, with assistance from the Intelligence Community, thoroughly investigated the transaction for national security concerns. CFIUS brought the Departments of Transportation and Energy into the review process to widen the scope and expertise of the national security scrutiny. These agencies will again be invited to participate in this new review process."

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