x Abu Dhabi, UAEWednesday 26 July 2017

Tribunal triumphs for Nakheel

Nakheel, the Dubai property developer, was celebrating a string of legal victories at the Dubai World Tribunal.

The World Islands project was one of the most ambitious property schemes to be implemented in Dubai during the boom years. Marwan Naamani / AFP
The World Islands project was one of the most ambitious property schemes to be implemented in Dubai during the boom years. Marwan Naamani / AFP

Nakheel, the Dubai property developer, has been celebrating a string of legal victories at the Dubai World Tribunal on Thursday.

In a judgement, the tribunal ordered a ferry company delivering goods and services to the man-made World islands to pay a Nakheel subsidiary Dh10m (US$2.7m) after ruling that it was entitled to ask for licensing fees from the scheme.

The court, which was specially convened in 2009 to hear disputes involving Dubai World and its subsidiaries following the Dubai World crisis dismissed a case brought by Penguin Marine Boat Services against The World, claiming that a lack of construction activity made its operations unfeasible. The World Islands project was one of the most ambitious property schemes to be planned in Dubai during the boom, comprising a vast map of the world to be developed off the coast of Dubai.

In the latest stage of a long-running legal saga that dates back to spring last year, Penguin argued that because Nakheel had allegedly stalled the project, it was breaching a contract signed in 2008 under which the ferry company was to build a port and manage the logistics of conveying construction materials and labour to the islands.

The company brought the case in response to an earlier demand by The World asking Penguin to pay Dh1.86m of advance payments plus licensing fees of Dh5m a year for two years and seven months of operations.

However, in Thursday's judgement, Sir Anthony Evans and Sir John Chadwick ruled: "The tribunal holds that the claimant (The World) is entitled to judgement for the amount … Dh7.5 million, together with the further instalment that became due on April 2011, making a total of Dh10m."

In a separate long-running case, the tribunal dismissed a claim made by the developer that bought the Sao Paulo island on The World islands that was suing Nakheel for allegedly backing out of a deal to transfer its payments into another development.

According to court documents filed the same day the tribunal ruled that Sao Paulo Development and Diamond Developers "failed to establish that the Nakheel parties entered into a binding contract to implement the consolidation requested. Their claim in these proceedings must be dismissed".

And in a third judgement also heard on the same day, the tribunal dismissed a case brought against Nakheel by AAPD Real Estate broker, the property agent involved in the sale of the World island of Taiwan claiming a 1 per cent commission on the sale, which it said was not paid.

lbarnard@thenational.ae