x Abu Dhabi, UAESaturday 22 July 2017

Reem Island investors take legal action

Investors in Tameer Towers are demanding their money back after construction stopped in July.

Workers at the Tameer Towers construction site on Reem Island downed tools in July after the contractor Al Rajhi failed to pay their wages for three months.
Workers at the Tameer Towers construction site on Reem Island downed tools in July after the contractor Al Rajhi failed to pay their wages for three months.

ABU DHABI // Dozens of investors in a Reem Island development are demanding their money back after a labour strike shut down construction at the site about four months ago.

At least three investors in the Tameer Towers development are pursuing the matter in court, with another 65 investors waiting until December to move forward with arbitration proceedings. Several investors said the developer, Tameer Holding Investment, stalled building after firing hundreds of workers this year and failed to notify investors about a new construction timetable.

"We were meant to pay for each floor constructed, but they stopped constructing floors and they still want us to pay," said one Dubai-based investor.

The Dh7 billion project was initially expected to include four buildings of residential and commercial space and a five-star hotel. The first homes were scheduled to be handed over earlier this year, though a new timetable released last year set a date of early 2013.

However, construction on the project, which began in 2007, has faced significant delays. When workers left the site in July, the most developed part, Tower A, had only 11 of its projected 69 floors completed.

A Tameer representative said "the project is on hold" and "official letters and emails will be sent to all investors with a new payment plan for all units". The representative could not say when construction would resume.

Roads to the site were closed earlier this month, and investors said hundreds of calls and emails to Tameer had gone unanswered.

"People just want a way out," another investor in Dubai said. "We gave Tameer our money, and some of us continued to pay in good faith and now they won't even talk to us."

Ismail Ali Rababah, a legal adviser at the law firm Baitul Hikmah in Abu Dhabi, said he expected a ruling in a case from the Federal Supreme Court within the month. Two other cases are pending in the Court of Appeals, after Tameer contested the lower court's ruling.

"My clients want to cancel their agreement, get their money back, and they want interest," Mr Rababah said.

Another 65 investors are waiting until December to move forward with arbitration, because Tameer Towers contracts allow the developer to extend the project's completion date by six months.

With the completion date listed as June 2011, investors are waiting until December to go to arbitration, said Thabit Al Temimi, a legal adviser with House of Justice who is representing the investors.

"Tameer is not building. That is a fact," Mr Al Temimi said. "This is one of the best contracts for investors I have ever seen, because it has an actual completion date and has a clause that allows clients to terminate their contract and receive their money back.

"Legally, I am 100 per cent sure we would win."

Mr Al Temimi said he tried to avoid taking legal action against Tameer. The lawyer said he offered the developer a chance to work out a deal where Tameer would take a percentage of the received money and refund between 70 and 90 per cent.

"Tameer was not interested," Mr Al Temimi said.

Workers went on strike at the site on Reem Island, a Dh30bn development about 600 metres off the coast of Abu Dhabi, on July 18 after the project's contractor, Al Rajhi Projects, failed to pay their salaries for three months.

Some workers said they had received a portion of their settlement last week, but many others said they were still waiting for end-of-service benefits and owed salary.

A Ministry of Labour official said legal action had been taken against Al Rajhi, freezing recruitment and new construction permits. The company could face further action and a fine of Dh10,000 per worker, up to Dh5 million.

jthomas@thenational.ae