Court upholds AED1.7m refund in Damac real estate row

Dubai developer must refund Irish couple for apartment delayed for more than three years
Court upholds AED1.7m refund in Damac real estate row
Damac may appeal the verdict, the companys legal representative said
By Shane McGinley
Mon 27 Jun 2011 08:25 AM

A Dubai court has upheld a decision awarding an Irish couple
an AED1.7m ($463,000) refund from developer Damac Properties on an apartment
delayed for more than three years, the claimants’ lawyer said on Sunday.

DIFC Court dismissed an appeal by Damac Park Properties, a
unit of the Dubai developer, to overturn an April 14 judgement in favour of
Noel and Lorna Gaffney.

The developer was also ordered to pay the Gaffney’s legal
costs of AED200,000 within 14 days of the judgment.

The ruling may spur a rash of similar legal cases against
the developer, the claimants’ lawyer Kaashif Basit said.

"I am absolutely delighted for the Gaffneys with this
result. I very much hope that for a change Damac will now be sensible and sit
down to reach an amicable settlement in the several other similar cases that we
have in the pipeline,” Basit, a partner at law firm KBH Kannuun, said in a

The couple has sought a refund on an apartment purchased in
Park Towers, located in the Dubai International Financial Centre (DIFC) free

The DIFC is governed by a different set of regulations to
the rest of the emirate.

The Gaffney’s purchased their apartment in December 2004 on
the understanding the unit would be delivered in early 2008, Basit said.

The claimants paid around 90 percent of the AED1.9m purchase
price, but delivery of the unit was delayed and the tower is only now nearing

The pair notified Damac Park Towers they were terminating
the contract in October 2010, citing breach of contract.

The decision offered hope to real estate investors in
similar situations, said Basit, but he warned court rulings depended strongly
on the contract in place.

“Each case depends on the contract and the Gaffneys had a
particular contract and terms that allowed them the recourse that they sought,”
he said.

“It allowed them to terminate when the developer had not
performed its obligations, there will be other contracts where that is not the
case. But the major implication is that if you have the merits on your contract
then there is recourse available.”

Damac’s legal representative said the firm was
considering whether to appeal the ruling.

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