x Abu Dhabi, UAEFriday 19 January 2018

Sky Gardens property lawsuit in Dubai starts trial at DIFC Courts

The lawsuit over the sale of Sky Gardens, one of the most notorious disputes arising from Dubai’s property crash in 2008, finally comes to trial today.

A panoramic view of Sky Gardens in Dubai which is at the centre of a legal dispute. Paulo Vecina/The National
A panoramic view of Sky Gardens in Dubai which is at the centre of a legal dispute. Paulo Vecina/The National

The lawsuit over the sale of Sky Gardens, one of the most notorious disputes arising from Dubai’s property crash in 2008, finally comes to trial today.

The education provider Taaleem, which brought the case against one of its shareholders, the Dubai-based investment firm National Bonds Corporation (NBC), and Deyaar Development, will be heard at the DIFC Courts.

The case concerns a series of transactions between 2008 and 2009 involving the luxury residential complex in the DIFC.

The Courts have scheduled nine days for the trial, the longest period assigned since they began operating in 2006.

The lawsuit, filed with the DIFC Courts in June 2010, stems from the Dh1.64 billion acquisition of Sky Gardens in mid-2008 by a special purpose vehicle of Amlak, the Islamic home finance company, from First Dubai Real Estate, the developer.

A tripartite deal between Taaleem, NBC and Amlak resulted in Taaleem acquiring a 33 per cent stake in the development, which would later be resold for profit, according to the education provider’s claim. NBC financed the acquisition.

In its claim, Taaleem said Deyaar signed an agreement later that year to acquire its stake at a premium, thereby assuming Taaleem’s debt to NBC. Taaleem also alleged that Deyaar subsequently tried to rescind and terminate its acquisition, as property valuations in Dubai had begun to decline rapidly.

Taaleem is represented by Hogan Lovells, while NBC and Deyaar are represented respectively by Brown Rudnick, and Afridi & Angell.

The trial, which Sir David Steel will preside over, is expected to run until November 7.

A judgement could be handed down by the end of the year.

jeverington@thenational.ae