Friday, March 03, 2006

Britain's High Court approves Dubai deal

Britain's High Court approves Dubai deal

LONDON (AP) — Britain's High Court on Thursday approved a Dubai state-owned port operator's takeover of British shipping company P&O, a deal that has caused an uproar in the U.S. among lawmakers concerned about port security.

Justice Nicholas Warren dismissed a last-minute appeal by U.S.-based Eller & Co. as he gave the required go-ahead for DP World's 3.9 billion pound ($6.8 billion) acquisition of the Peninsular and Oriental Steam Navigation Co.

"The objections of Eller do not persuade me that I should not sanction the scheme," Warren said.

The judge agreed to place a stay on his ruling until 3 p.m. Friday to allow the U.S. company time to take its case to the Court of Appeal.

Eller, which provides cargo-handling services to 90% of cruise ships at the port of Miami, had argued that U.S. concerns about a United Arab Emirates company owning significant operations at six major U.S. seaports could substantially harm its business.

The judge said he took U.S. concerns into account.

"I have been treated to a large amount of evidence on press releases and articles which were no doubt being spun to this direction or that," Warren said.

DP World, which has already received approval from the Committee for Foreign Investment in the United States, has tried to douse some of the U.S. outcry. It volunteered to submit to a second 45-day investigation of the potential security risks of its plans to run shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Paul Downes, Eller's lawyer, argued it was irrelevant to Eller's case whether the U.S. worries about DP World's takeover were justified.

"The concern was that the United Arab Emirates was a player, was involved, was associated with terrorist funding," Downes told the court. "It doesn't matter whether this is right or wrong, that is the mindset of the individuals that are concerned about this takeover."

Martin Moore, a lawyer for P&O, had told the High Court during a three-day hearing that Eller's case against the deal was "woefully thin."

President Bush has supported the deal and U.S. lawmakers initially opposed seem to have softened slightly, tempering calls for an immediate vote on legislation to block the takeover. Many said the new probe reassured them and negated the need for legislation for now.

Warren noted that the company has agreed to the extra review.

"The ports involved will continue to operate and it will be an overriding concern of everyone, including Congress and the president, to ensure that is so," he said.

A U.S. federal judge also has ruled against a request by the state of New Jersey to order an investigation into the takeover.

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