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Thu 10 Apr 2014 10:08 AM

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Dubai's Al Habtoor settles development case with Qatari sheikh

Habtoor Leighton Group had filed 73 legal suites against Al Faisal Holding, owned by Sheikh Faisal bin Qassim Al Thani

Dubai's Al Habtoor settles development case with Qatari sheikh
Al Habtoor Group chairman Khalef Al Habtoor.

Dubai-based contractor Habtoor Leighton Group (HLG) has reportedly settled dozens of legal cases brought against a company owned by a Qatari sheikh in a long-running dispute over payments related to the $325m Doha City Centre development.

Khalaf Al Habtoor revealed to Arabian Business in August that he had filed 73 separate cases against Al Faisal Holding, the overarching company owned by Sheikh Faisal bin Qassim Al Thani, who is related to the Qatari Emir.

Al Faisal Holding is a master developer of the Doha City Centre project, of which HLG, the Middle Eastern subsidiary of Australian company Leighton, has a $325m contract to construct five hotels - branded Renaissance, Marriott, Shangri-La, Rotana and Merweb – connected to the massive Doha City Centre Mall. The Renaissance and Marriott hotels are already completed.

HLG also has built or is building numerous apartment towers in Doha under contract with Al Faisal Holding.

The most significant of the legal cases was launched after Al Faisal Group unexpectedly sought to cash in on $100m worth of performance bonds being held by a bank as security for the completion of a phase of HLG’s work on the Doha project.

HLG argued the unexpected cashing in of the bonds was “illegal and unethical”.

The developer claimed it is owed more than AED1bn ($272.25m) by Al Faisal Holding.

Al Faisal Holding chairman Sheikh Faisal Bin Qassim Al Thani said last year that the project was six years behind schedule and blamed the contractor’s “mismanagement of these contracts”.

The case has been settled in a Doha court, according to The Australian newspaper, with a new timeline for completion of the project set for 18 months.

Leighton will continue working on the project and will be paid by its client in phases, the report added.

“The client has paid approximately 40 percent of the outstanding monies on the signing of the agreement and will pay a further 20 percent over the next few weeks. The balance of the remaining monies owing will be repaid over the next 18 months following handover of the remaining projects to the client,” Habtoor Leighton said in a statement.

Habtoor Leighton already has completed two phases of work around City Center mall, including building two hotels attached to the commercial complex – the Renaissance Doha and the Courtyard by Marriott.

Neither party could be reached for comment by Arabian Business.

Update: On April 15 Al Faisal Holding (AFH) issued the following statement: "Al Faisal Holding (AFH) has, in good faith, entered into a settlement agreement with Habtoor Leighton Group (HLG) on April 6, 2014. HLG has undertaken that it will complete the works on the Phase III City Center Expansion project (consisting of three (3) Hotel towers) no later than six (6) months from the signing date. The settlement agreement also provides for milestone payments to be made which are directly related to HLG’s six (6) month completion of works schedule, and the completion of any snags relating to the works. As a result of the settlement agreement, AFH has dismissed the various legal cases it has filed in Qatari courts related to this matter.

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