Court challenge puts port deal on hold

| Friday, March 03, 2006

Just one day after the British High Court approved a controversial transaction that would turn some major U.S. port operations over to Dubai Ports World, a challenge from a Miami company has been granted the right to be heard in Britain’s Court of Appeal. The move effectively puts British approval of the deal on hold.

The Associated Press reported that Miami-based cargo handler Eller & Co. is challenging the deal, claiming that its business could be harmed by U.S. concerns over a United Arab Emirates company controlling operations at U.S. ports.

Bloomberg reported that Eller & Co. is a business partner of Peninsular & Oriental Steam Navigation Co., the company at the heart of the takeover bid.

A spokesman for Eller & Co. told Bloomberg that its shareholders are concerned that Dubai’s agreement to a 45-day inspection period could hurt business at the Port of Miami and that it “fundamentally altered the terms of the deal” by agreeing to the delay.

Britain’s Court of Appeal said it would hear the petition for appeal on Monday, March 6. If the right to appeal is granted, the court will hear the case immediately.

Approval of the deal – which would give Dubai Ports World control over significant operations of various degree in 21 U.S. ports – was handed down by Britain’s High Court on Thursday, March 2. The AP reported that if the Court of Appeal refuses to hear the case, the approval will go forward as planned.

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