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Mon 9 Jan 2012 03:42 PM

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Ex-Nakheel CEO sees court verdict pushed to Jan 24

Chris O’Donnell has sued state-owned developer for $3.7m claiming breach of contract

Ex-Nakheel CEO sees court verdict pushed to Jan 24
ODonnell hopes to secure more than $3.5m in a payout from Nakheel

A Dubai tribunal on Monday delayed its verdict in a $3.7m legal battle between state-owned developer Nakheel and its former CEO.

Chris O’Donnell will now have to wait until Jan 24 to learn whether his attempt to sue the developer behind Dubai’s palm-shaped islands for breach of contract has been successful.

 The former CEO of Nakheel is claiming $3m in two overdue long-term incentive payments, alongside sums related to damages, currency fluctuations and interest.

Lawyers for O’Donnell argued he had completed his fixed five-year term, which saw him receive an annual salary of about AED4.8m, and was entitled to the two $1.5m payouts.

Nakheel has countered the claims in part by arguing that O’Donnell resigned before the end of his fixed-term tenure and thus was not entitled to his five-year incentive payment.

In a trial hearing last month, lawyers for the developer claimed the former CEO had failed to perform his duties and had “hung around” in order to complete his term and collect his payment.

Tim Taylor, for Nakheel, remarked that O’Donnell had received “a large amount of remuneration and had left a company that the government has had to bail out.”

The Dubai World Tribunal’s three-judge panel said in December it expected to rule on the case early in the new year, following a day and a half of hearings.

Nakheel said in September it wrote down AED78.6bn ($21.4bn) from the value of its real estate during the Dubai debt crisis, which saw house prices in the city fall more than 60 percent from their peak.

The company made hundreds of staff redundant as it struggled to stem losses.

Former Nakheel General Counsel David John Nicholson, whose case against the developer was also adjourned to January 24, previously won a AED752,000 ($205,000) ruling against the developer after his role was terminated with a month’s notice.

Red Snappa 7 years ago

In many respects this is a pivotal ruling, as there were other less high profile employees of the same company whose services were dispensed with, and would take the matter to the courts if they thought they had a reasonable chance of a fair settlement.

Transparency is an important factor, in other words to be made aware of a full and balanced argument, assuming the technicalities are sound then the terms of C.O'D's should be honoured. Yet more damage to corporate reputation is to be avoided at the present time.

ScotsExpat 7 years ago

@Red Snappa.

Remember, this IS Nakheel we are talking about. I believe their reputation has been well and truly ripped to shreds over the last few months.

charles 7 years ago

reading this comment from the Nakheel employee, and the various fracas they are involved with with their own clients, is just worrying.
"Tim Taylor, for Nakheel, remarked that O’Donnell had received “a large amount of remuneration and had left a company that the government has had to bail out.”

If Taylor's justification on past actions is based on future events, the world changes over night.

O'Donnell's salary was huge. We all wish we had it. But we didnt negotiate the contract.
He did, and Nakheel signed it and were fine paying that for 4 years. So they should honour it for the contract period and whatever else he is entitled to. That is what a contract is.
The should not refuse to do so because of events unforseen later.

A fundamental rule of law is dependent on this case. I hope it turns out correctly for Dubai as a whole.

Owner at Shoreline 7 years ago

Nakheel is right and should not give reward for failure.

Previous tenant in the Shoreline 7 years ago

"Nakheel is right"?
Having lived in the Shoreline for 11 months, I decided I no longer had the patience to find out. My bad. If someone else in the Shoreline believes Nakheel is right, about anything, then I am delighted and truly happy for them.

johm smith 7 years ago

Nakheel is trying to blam their failure on someone, their miss management lead to their failure.