Nakheel claims O’Donnell defence was “strong”

Dubai developer Nakheel claimed it believed its unsuccessful defence against former CEO Chris O’Donnell’s $3.7m law suit was “strong” and it would appeal the decision against it if it were possible.

In a court ruling on Thursday, the Dubai World Tribunal awarded O’Donnell $3m in overdue long-term incentive payments and AED916,893.93 ($249,624) in days in lieu he had worked and was contractually entitled to. The verdict was the conclusion of a legal dispute brought by O’Donnell in June last year.

“We respect today’s court ruling,” a Nakheel spokesman said. “However, we firmly believe we have a strong case and if we had the right to appeal we would have done so.”

Under the terms and conditions of the Dubai World Tribunal cases cannot be appealed once a final verdict has been awarded.

Following the verdict, O’Donnell told Arabian Business he was “very pleased” with the result. “Whilst I have been entirely vindicated by the Dubai World Tribunal, I am naturally disappointed that, despite my best efforts at compromise the matter was not able to be resolved amicably without the need to take costly legal proceedings that vented Nakheel’s internal business in a public forum,” he added.

As part of a $3.7m original suit, O’Donnell had also claimed sums related to currency fluctuations, which were dropped, and airfares for him and his family, which were partially upheld.

Nakheel had tried to counter the claims by arguing that O’Donnell resigned before the end of his fixed-term tenure and thus was not entitled to his five-year incentive payment.

In a trial hearing in December, lawyers for the developer claimed the former CEO had failed to perform his duties and had “hung around” in order to complete his term and collect his payment.

Tim Taylor, for Nakheel, remarked that O’Donnell had received “a large amount of remuneration and had left a company that the government has had to bail out.”

Matthew Showler from law firm SJ Berwin said Nakheel was “disappointed’ by the judgment and held the believe the appropriate avenue for the dispute should have been the Ministry of Labour

“Our client stands by its decision to rigorously defend Mr O’Donnell’s claim. It is our client’s position that the federal law prescribes that Mr O’Donnell’s claim should have been brought to the Ministry of Labour… This is a view that is held by the Ministry of Labour,” Showler told reporters on Thursday.

Interest and costs in the case have yet to finalised.

Nakheel said in September it wrote down AED78.6bn ($21.4bn) from the value of its real estate during the Dubai debt crisis, which saw house prices in the city fall more than 60 percent from their peak.

The company made hundreds of staff redundant as it struggled to stem losses.

Former Nakheel General Counsel David John Nicholson last August won a AED752,000 ($205,000) ruling against the developer after his role was terminated with a month’s notice.