By Ed Attwood
Investors waiting on response from crown prince, mulling legal action to recover funds
Investors at the troubled Marina West property development are planning to file a slew of lawsuits against the developers, Arabian Business has learnt.
Buyers from the $750m project in Bahrain’s Budaiya Village, where work ground to a halt in March 2010, will take their complaints to court unless “an acceptable and timely solution” is found.
Over 120 investors have signed a petition against AAJ Holdings and MJ Holdings, which was submitted in November to the office of Sheikh Salman bin Hamad Al Khalifa, Bahrain’s crown prince and chairman of the Economic Development Board.
In an email seen by Arabian Business, the investors group said it had been advised by a Bahraini lawyer to wait until it had received a response from the crown prince, failing a satisfactory solution to the dispute, before filing a suit.
The email said that each suit would typically be on behalf of a single individual, who would then give their lawyer five percent of the total amount being sought as a front payment, and another five percent at the conclusion of the suit.
“There are risks of delays and not winning the case, but the lawyer said the likelihood of winning is quite good these days. An Asian lady recently won such a suit against Riffaa Views project for non-delivery on time,” the email said.
The correspondence went on to say that if an apartment owner won a suit, then that owner’s entire building would be shut down. The group says it has owners in five buildings who are now prepared to go to court.
“We have owners in buildings 2, 3, 4, 7 and 11 who are ready to go ahead,” the email said.
“The bank that is holding a mortgage against the Marina West land may also be planning a suit, as also the main contractor and several other contractors and suppliers of building materials who are owed substantial sums and who may file their own suits.”
If the suits are successful, a judge then has several options, including jailing the developer, or inviting alternative investors or developers to come in and complete the project, the email added.
In May 2010, Marina West’s chief executive, Mahmood Janahi, said that he was determined to complete the project, and that negotiations were under way with a series of potential investors to add “fresh impetus” to the residential site.
But the Group of Marina West Apartment Buyers said that members had received a letter from Janahi in October saying that the developers had been unable to raise the funds needed to deliver the project.
In November, Janahi then told the Gulf Daily News that work would restart onsite in January 2011.
The email said that the developer had been in touch with several Marina West buyers, claiming that it had spread several rumours about the project.
Those rumours included the fact that developer officials had friends in the government, that the government would not want to intervene in a private project, and that new investors were about to buy into unsold towers.