Global law firm Baker McKenzie has successfully acted for Dubai Islamic Bank in its defence of a $2 billion claim brought against it in the English Commercial Court by Plantation Holdings, a company owned by an Argentinian property developer.
The claim was based on allegations of breach of contract and breach of the bank's duties as mortgagee in possession of a 20 million square foot plot of land on the outskirts of Dubai, which Plantation had planned to develop into a high-end luxury lifestyle and equestrian complex, a statement said.
It added that the bank took security over the project as part of the restructuring of a $500 million debt owed to it as a result of a complex receivables financing fraud.
The case was heard in an eight week trial, with Mr Justice Picken ruling that Plantation's principal director had "made up" evidence and that another of Plantation's witnesses had "manufactured" documents.
Baker McKenzie also said that the bank was ordered to pay nominal damages, calculated in the sum of £1 while Plantation has been ordered to pay 70 percent of the bank's costs on the indemnity basis.
Plantation was also refused permission to appeal, the statement said.
London-based partner Hugh Lyons said: "This is a great result for our client in a major litigation case, which is among the most significant and most complex commercial disputes in the market. This a great validation of the work done by the Baker McKenzie team, who successfully navigated the substantial value of the claim, and the complex issues in the case."
He added that the nature of the case also resulted in examining the volatility of the Dubai property market and the functionality of its property registration system, as well as the Dubai authorities' approach to financial misconduct.
It also raised questions as to the interplay between English, Dubai and Sharia law in financing transactions.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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