ICTSI Denied Leave to Appeal Maersk Interdict Over DCT Partnership

International Container Terminal Services Inc. (ICTSI) has expressed disappointment with the KwaZulu-Natal High Court’s decision to deny its application for leave to appeal an interdict.

The interdict temporarily halts Transnet from implementing the public-private partnership agreement awarded to ICTSI for operating the Durban Container Terminal Pier 2.

ICTSI secured the agreement in 2023 after what it described as a “rigorous, transparent, and fair bidding process,” but the contract was interdicted in March 2024.

While ICTSI acknowledged that the denial of the appeal was not entirely unexpected – given Transnet’s decision not to challenge the interdict – it reiterated its view that the judgment granting the interdict contained significant legal errors.

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The interdict prevents Transnet, the state-owned entity, from proceeding with the partnership until a full court review is conducted next year, making it difficult for ICTSI to proceed with its appeal.

In October, the KwaZulu-Natal High Court instructed Transnet to pause further implementation of the agreement until the review could take place.

“ICTSI adequately proved its financial capacity to perform on the terms of the contract during the bidding phase. Transnet and their auditors were satisfied with this when it took the decision in July 2023 and in a second independent review in 2024,” said Hans-Ole Madsen, ICTSI’s regional head for Europe, Middle East, and Africa. “We remain resolute in our belief that the main case will demonstrate the strength of our financial position.”

The interdict arose from legal challenges initiated by Maersk, through its subsidiary APM Terminals, which was one of the unsuccessful bidders. APM Terminals contested the contract on what ICTSI called “a non-material technicality.” ICTSI maintains that Maersk’s arguments, particularly regarding ICTSI’s solvency, are misleading.

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“ICTSI says Maersk has misleadingly argued that ICTSI does not meet a technical definition of solvency—a metric used to show its financial ability to meet its obligations.” ICTSI disputes Maersk’s interpretation of solvency calculations, arguing that the tender did not specify how this metric should be assessed.

Despite this setback, ICTSI remains confident about the full review process scheduled for March 2025. “We believe the denial of leave to appeal represents a missed opportunity to rectify errors,” ICTSI stated, but vowed to “vigorously defend its position” when the main case is heard.

The Durban project is significant for ICTSI, which is a global port management company operating in 19 countries, including major economies like China, Brazil, and Australia.

ICTSI currently manages 32 port terminals worldwide, generating an annual turnover of approximately $2.4 billion (R41 billion).

As part of its successful bid, ICTSI committed to paying $618 million (R11.1 billion) to Transnet for a minority stake in the joint venture company. APM Terminals, which ranked second in the bidding process, had offered $515 million (R9.1 billion). In his October 2024 ruling, Judge Mossop highlighted these figures, which underscored ICTSI’s superior financial proposal.

Despite the legal and procedural hurdles, ICTSI said it remains focused on demonstrating its capability and delivering value through the public-private partnership. The company emphasized its global expertise in managing complex terminal operations as a testament to its readiness for the Durban project.