Tecom slapped with $1bn lawsuit

CONTRACTUAL DISPUTE: Capital Partners was developing a $1 billion mixed-use development in DIC.

Dubai-owned Tecom Investments is being sued for $1 billion by a US real estate company, claiming the free trade zone operator unjustly cancelled its development contract.

Capital Partners alleges Tecom illegally sold it land owned by another government entity and when the developer withheld a payment over the dispute Tecom cancelled the contract, the UK's Financial Times reported on Friday.

The dispute, which dates back to 2005, revolves around a protected archaeological site allegedly owned by Dubai's tourism department within the 1.7 million-square foot plot Capital was developing, according to the newspaper.

The company was planning to build a $1 billion mixed-use project called River Walk in the Dubai Internet City (DIC) business park owned by Tecom.

“Tecom misrepresented what they own,” said Jonathan Wride, managing director of Capital Partners, quoted the Financial Times. “I am very confident we will receive a judgment in our favour.”

However, Tecom says it had was within its right to cancel the contract over the non-payment and that Capital did not bring up the archaeological site until after the contract was cancelled, according to the paper.

Tecom claims it in fact owned the archaeological site.

The case is currently before the Dubai International Arbitration Centre and is being viewed as an important test case for the centre's new arbitration code passed last year, according to the newspaper.

The regulations are aimed at creating a level playing field for foreign investors when resolving disputes with local companies.

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USER COMMENTS (2 COMMENTS)

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Tecom slammed with $1 bn lawsuit - Timely intervention by the Ruler of Dubai is the only way left with TECOM
Posted by MASHOOR M. REYAL, DUBAI, UNITED ARAB EMIRATES on Saturday 9 February 2008 at 17:49 UAE time


It is in the interest of maintaining a sustainable development, I trust the Ruler of Dubai, His Highness Sheik Mohammed bin Rasheed Al Maktoum, will intervene into the matter and use his influence to settle the matter in an amicable manner based on the highly recognised principles of win-win methods widely used by the higly recognised Arbitrators. This method is called "Alternate Dispute Resolutions (ADR)" which is being widely adopted by all and sundry in the Construction Industries world-wide. It is always better to go for this method than allowing the issue to blow-up to the extent of arbitration or litigation where all the parties involved will be losers at the end!

MASHOOR

Tecom slammed with $1 bn lawsuit
Posted by Lee, Dubai, UAE on Saturday 2 February 2008 at 15:31 UAE time


If Capital Partners loses, big foreign companies will think twice before investing in Dubai, regardless of the facts of the case.

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