Limitless, the Dubai developer, has been ordered to pay back more than Dh23.6 million to a Saudi investor after a long-running property row.
The Dubai World Tribunal judges Sir Anthony Evans and Michael Hwang found in favour of Sheikh Khalid Al Qahtani in a dispute surrounding two plots of land for office development in Limitless' Downtown Jebel Ali project in Dubai valued at Dh240m.
The case could have implications for other out-of-pocket property investors, lawyers say.
Sheikh Al Qahtani and his Dubai-based investment company Pinnacle Business Towers Company paid the cash to Limitless in June 2008. However, according to court documents, the dispute arose between the two sides over what the cash was to be used for.
The developer said that the cash had been paid as a deposit on the purchase of the land as part of a binding sale. But the investor said that the cash was paid to "freeze the price" and "give exclusivity" on the plots until a sales and purchase agreement was signed.
Sheikh Al Qahtani and his company argued that the documents signed were not detailed enough to be legally binding. They added that they had not been told that the cash would be lost if the project did not go ahead.
Limitless now has until May 15 to find out how much it will be ordered to pay in total by the court - a sum which could include interest payments and legal costs.
According to Brown Rudnick, the lawyers acting for Sheikh Al Qahtani in the case, the judgement could have huge implications for both developers and the thousands of UAE property investors who lost deposits following the property crash, or own units in projects which have been slowed or suspended.
"We believe that this decision may prove helpful to any investor who put down money on property with minimum documentation before the global financial downturn - both before the Dubai World Tribunal but equally to those who might want to refer to claims in the Dubai courts or courts elsewhere in the UAE," said Nicholas Tse, the lead counsel for Sheikh Al Qahtani and a partner in Brown Rudnick's international litigation and arbitration practice.
"The reality is that there may be hundreds or even thousands of investors in the same position. We believe there are a number of other cases and potential claims dealing with deposits paid for Dubai, including claims before the Dubai World Tribunal which are currently sub judice, so we believe this case may well have future ramifications for existing DWT and UAE claims, and potentially for many others who have not yet gone to law."
Limitless declined to comment.
Meanwhile, there was better news for Limitless' sister company, Dubai-based Nakheel.
The property company behind mega-projects such as Palm Jumeirah and the World Islands yesterday announced that it had sold all 471 villas at its Jumeirah Park and Jumeirah Village Circle schemes.
Nakheel said the combined sales values for the villas totalled Dh1.9 billion. It added that construction of the 381 so-called "legacy villas" was currently under way and expected to be completed by the end of next year. It added the contractor for the Jumeirah Village Circle project was expected to mobilise by the end of this month.