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Wed 7 Apr 2010 11:03 PM

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Dubai World's Limitless first target of tribunal claim

Claim filed by a former employee and a notice has been served to the company.

A special tribunal set up by Dubai to handle debt claims against the subsidiaries of its Dubai World holding company has received its first case, a key filing that may set the tone for other potential claims.

A claim was filed against Limitless on April 5 by a former employee of the company and a notice has been served to the company, a spokesman for the special tribunal's registrar's office said.

Additional details will be provided after Limitless confirms receipt of the notice.

A spokeswoman for Limitless said: "This is a legal dispute and it is inappropriate for us to comment."

Dubai World rattled global markets in late November when it said it would delay repayment of $26 billion in debt linked to Dubai World and its property units Limitless and Nakheel, builder of islands shaped like palms and a map of the world.

Dubai set up a special tribunal in December made up of three international judges to oversee the restructuring of Dubai World debt and settle any disputes that could arise from it.

Until April 5, the tribunal had not received any official claims, making the Limitless claim the first to test the system.

The tribunal has, however, received numerous inquiries from law firms and creditors seeking information on procedures, said a source familiar with the matter.

The claim would become a partial litmus test for the tribunal but would not likely chill the market's view of Dubai World's debt restructuring because the claim comes from an employee, not a lender or trade creditor, said an attorney with a major law firm who requested anonymity.

Limitless, which once attempted to build a 75 kilometre inland waterway called the Arabian Canal, was excluded from Dubai World's highly anticipated restructuring plan, unveiled on March 25.

Limitless' lenders, which include UAE banks such as Emirates NBD and Emirates Islamic Bank and international players such as Royal Bank of Scotland, asked for the company to be left out of the overall restructuring so that the loan could be negotiated separately.

Limitless has already succeeded in rolling over a $1.2 billion Islamic loan due in March. (Reuters)

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