x Abu Dhabi, UAESaturday 22 July 2017

No new Nakheel cases 'to be heard by tribunal'

The Dubai World Tribunal will not hear any new cases involving Nakheel, the chairman of the developer says.

The status of Nakheel cases can be changed only by a new government decree or a tribunal decision on the jurisdiction, some legal analysts believe. Pawan Singh / The National
The status of Nakheel cases can be changed only by a new government decree or a tribunal decision on the jurisdiction, some legal analysts believe. Pawan Singh / The National

The Dubai World Tribunal will not handle any new legal claims involving Nakheel, the developer's top executive says.

"No new cases will be in the tribunal," Ali Rashid Lootah, the chairman of Nakheel, told The National. "We are now back to the original position. Back to the law of the land."

The Government's department of legal affairs has reportedly issued a policy decision removing new Nakheel cases from the tribunal, which was established two years ago to handle disputes involving Dubai World and its subsidiaries.

But the status of Nakheel cases remains unclear, after the company's formal separation from Dubai World on August 23.

Last week Sir Anthony Evans, the tribunal chairman, issued a "practice direction", stating the tribunal would decide whether or not the court had jurisdiction over cases involving companies no longer subsidiaries of Dubai World, including Nakheel.

The direction required any claimant involving Nakheel to raise the jurisdiction "at the outset" of any proceedings. The direction made no mention of a government policy decision.

The status of Nakheel cases can be changed only by a new government decree or a tribunal decision on the jurisdiction, some legal analysts believe.

The tribunal was established in 2009 by decree of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, when the government-owned Dubai World began reorganising in the face of billions of dollars of debt.

The tribunal provides a streamlined process, in English, to hear complaints, using the rules of the Dubai International Financial Centre courts. The tribunal follows international common law standards, including the recognition of binding precedent.

Tribunal claims and rulings are posted on a website, usually within days of a filing.

"The tribunal has convinced claimants that it is transparent and fair jurisdiction," said attorney Jonathon Davidson, who has handled several cases before the tribunal.

Without the tribunal, Nakheel cases will be handled by Dubai civil courts, which have stricter rules about oral evidence and limit the opportunity to cross examine witnesses, attorneys say.

Of the 42 cases filed with the tribunal this year, 33 involved Nakheel, including claims focused on the status of the The World, the man-made island project developed by Nakheel.

"I think the tribunal did a good job for a certain period," Mr Lootah said. "But people got into business in Dubai based on Dubai law. So there is nothing wrong with going back to the original position.

"That will be fair to all parties."

Nakheel also used the tribunal to file claims, including cases against buyers who have not paid for islands in The World. But the tribunal is no longer necessary, now that Nakheel has completed its Dh60 billion (US$16.33bn) restructuring, Mr Lootah said.

"The tribunal for a certain period was useful, but now that things are under control, we don't think there is a need for the tribunal," he said.

The legal community has been awaiting a decision on Nakheel's status with the tribunal. Some have vowed to continue to file claims with the tribunal until either the courts rule on the tribunal's jurisdiction or a new decree is issued.

Without a government decree, attorneys could argue that the court's jurisdiction stems from the time of the dispute, not the date of the filing. But if the tribunal is no longer accepting new cases, it could force attorneys to reconsider their cases.

"If that is the case, the claimant community will have to look hard at what the options may be," Mr Davidson said.

kbrass@thenational.ae