By Elizabeth Broomhall
Group of 48 investors in stalled Dubai project settle out of court for full refund from developer
Investors in Dubai’s stalled Palm Springs project have reached a deal with developer Damac for a full, upfront refund on payments made for their uncompleted properties.
Buyers on the Palm Jebel Ali project, who have waited eight years for construction to begin, were previously offered a 70 percent refund of their deposits, or 25 percent immediately followed by a further 25 percent annually for the next three years
Of the 48 investors involved, 21 have received payment, and a further 27 are expected to receive their cheques in the next two weeks.
“We received cheques for almost half of the investors. The cheques for the other half are in the process of being arranged,” said Fareya Azfar, partner and head of arbitration at The Legal Group (TLG), who advised the investors.
“The group of investors believed that a partial refund was not a fair compensation, so they wanted us to negotiate with Damac in the hopes of reaching a more acceptable settlement.”
Investors had initially hoped to receive compensation for their lost investment, but settled out of court with the developer in a bid to avoid a lengthy legal battle, said Azfar.
“The investors are pretty satisfied. They were told that we don’t know of any developer in UAE who gave a 100 percent refund in one payment without a court case initiated against them.”
Announced during Dubai’s real estate boom, Palm Springs was designed to be a 25-storey beachfront development located on Nakheel’s Palm Jebel Ali island, but stalled in the wake of the emirate’s real estate crash.
Damac had attempted to cancel the project in 2008, but the move was fought by investors through meetings in the UK and Dubai, and the threat of legal action.
Damac later agreed to reinstate the development, and wrote to investors last year to say it was in discussions with Nakheel, and a decision on Palm Springs would be made in December.
In a statement to Arabian Business, Niall McLoughlin, senior vice president of corporate communications at Damac, said the company had been committed to solving the dispute.
“We are happy that we can now bring closure to this issue,” he said.
The above article is incorrect. Not all 48 investors agreed to settle with Damac. Those investors who settled will receive their cheques shortly. Those who chose not to settle will take their own course of action.
I would beg to differ with your statement above. The above article is indeed correct; there a very few members who have not and they may choose to take their own course of action but 48 of them have agreed to the offer. The information given to and published is absolutely accurate
Any idea on what damac plans to do with its tower in business bay called commercial square, earlier known as haz tower. It is over 5 years since launch and no news yet of construction. They have collected over 40%, but are not starting work nor refunding money back. Please advice if there are others also stuck in this project.
I am an ivestor in Commercial Square also. Your information is incorrect, the tower is already above the 15th floor and construction us going ahead at a very good speed. I visited the building when I was last in Dubai. I am looking forward to seeing it completed
I am an inverstor in the Las Residence (Lotus) towers in Business Bay, is there a group who are persuing the same recourse with Damac.
Fareya, just for clarity, the group comprised of 48 investors of which 46 have settled. I suggest you recheck your numbers as I have just confirmed this with the group directly via Craig. Thank you.
Very informative information. Appreciate if someone has any information about Badrah Phase 2 Manara district at Waterfront by Nakheel? Any suggestion on possible course of action. Thanks
Yup work is on full swing currently, with momentum mostly from i think in 2010 and 2011, a year or two after delivery date.
I am sure investors will have a right to get a refund in this case too due to the breach.
TLG and in particular Fareya and Mr Alshamsi were brilliant in negotiating with Damac. I received my full repayment from Damac and very satisfied with TLG.
FINALLY justice for investors! Wishing more win their cases as it is the just and responsible resolution!