A ruling by a Dubai tribunal that blocked Nakheel’s attempt to raise AED41m in late fees from a buyer on the World development will set a precedent for other investors jilted by the firm, a lawyer for the claimants has said.
“There are cases being filed as we speak, there’s another case with a similar scenario that’s been filed,” Jonathan Davidson, managing partner at UAE-based legal firm Davidson & Co, told Arabian Business.
“We are receiving calls on a daily basis and we’re advising people [who are] in similar situations. There’s going to be a number of investors who are going to be looking to file now.”
Nakheel, the real estate arm of troubled conglomerate Dubai World, was last Tuesday ordered to credit nearly AED30m in downpayments to a plot in Jumeirah Village, after a court ruled it was unjustified in seeking late fees from the buyer.
The deal was part of a credit swap that allowed a buyer on the World to switch its investment from the delayed offshore development to the completed Jumeirah plots, and receive real estate to the value of its credit.
Nakheel had attempted to impose AED41m in late fees after the contract had been agreed, a move that was overruled by the tribunal.
The two-day trial was the first completed by the Dubai World tribunal, a panel set up to resolve disputes relating to Nakheel’s parent company.
“At the end of the day, the tribunal is made up of some incredibly experienced judges, and they saw the facts for what they were,” Davidson said. “They were saying there was an agreement, it was binding, and that Nakheel later changed their minds.”
The verdict is likely to have far-reaching implications for other buyers embroiled in legal disputes with Nakheel.
“There are a lot of interested parties who have been waiting to see what happens and didn’t want to be the first ones in there,” Davidson said. “What I would say is each set of facts do tend to be different – you can’t cookie cut this decision, but there are lots of people in the market who have similar situations and this verdict will be a help more than a hindrance.”
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