x Abu Dhabi, UAEThursday 27 July 2017

Hearings end in O'Donnell's $3.7m claim against Nakheel

Court hearings ended yesterday in a high-profile case where one of Dubai's biggest former property executives is claiming about $3.7 million in severance pay and other benefits from his old employer.

Court hearings ended yesterday in a high-profile case in which one of Dubai's biggest former property executives is claiming about US$3.7 million (Dh13.5m) in severance pay and other benefits from his old employer.

Chris O'Donnell, the former chief executive of the property giant Nakheel, filed the case with the Dubai World Tribunal. Mr O'Donnell, who earned about Dh400,000 a month during a five-year tenure that ended in June, claims he is still due $3m in long-term incentive payments, plus interest and numerous other entitlements.

The hearings yesterday followed another on Monday during which Mr O'Donnell took the stand and was questioned by Nakheel's lawyers. Yesterday's proceedings mainly addressed questions of the tribunal's jurisdiction and the date on which Mr O'Donnell left Nakheel.

Nakheel has countered Mr O'Donnell's case principally by arguing the tribunal does not have jurisdiction to hear it and that it should have been brought before the Ministry of Labour.

The company's lawyers have also said Mr O'Donnell's performance as chief executive was lacking, painting a picture in legal documents of a man who acted against the company's interests in breach of his duties.

Mr O'Donnell and his lawyers have denied those claims, saying he acted properly and that there was no dispute between him and Nakheel at the time he left.

The timing of Mr O'Donnell's departure became an issue because of a so-called "long-term incentive" payment that was contractually due to him at the end of five years in his position. A $1.5m payment was one of two he was set to receive, the other due at the end of four years of service.

Mr O'Donnell reportedly left Nakheel on about June 9 this year, but his contract expired a week later. Lawyers for Nakheel earlier presented arguments that he had "effectively" resigned before the end of his contract, thus relieving the company of the obligation to make his five-year incentive payment. But they conceded in the hearing yesterday that his contract had simply expired.

The case is being heard in the tribunal because Nakheel was formerly a subsidiary of Dubai World. The tribunal is a special court created to settle disputes with the government-owned conglomerate as it underwent a sweeping restructuring. Nakheel was separated from Dubai World in August, several months after Dubai World completed a $24.9 billion debt restructuring.

At the end of the hearing yesterday, the tribunal's three-judge panel said it expected to make a judgement in the case soon, but not before next year.

 

afitch@thenational.ae

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