More than a dozen investors in a stalled Reem Island development have formally filed an arbitration case in an attempt to get millions of dirhams refunded.
Tameer investors file group arbitration case over Reem Island project
ABU DHABI // More than a dozen investors in the delayed Tameer Towers project on Reem Island have formally filed their legal group arbitration case.
Scores more plan to file similar cases within the next few months, while others are awaiting an arbitrator's decision before taking action against the project developer, Tameer Holding Investments.
"Finally, we lodged the case and we can now see what Tameer will say," said Thabit Al Temimi, a legal adviser with House of Justice, the Abu Dhabi law firm representing at least two groups of investors seeking arbitration.
Work on the Dh7 billion development in the Shams Abu Dhabi district of Reem Island stalled in July when unpaid labourers went on strike. The project was initially expected to open in 2011 but has faced significant delays.
Last month, Tameer said a new contractor, the project's third, would be named before April and the first phase of the project would be completed in the fourth quarter of 2013.
For the more than 100 investors who are going to arbitration, the new timetable comes too late.
"I will cut my losses and call it a day," said one investor, who has paid Dh600,000 to Tameer.
"I don't have the time or the resources to commit to this project anymore, only to be told in another 18 months' time that there are issues with the development."
The project initially consisted of four residential and commercial towers and a five-star hotel.
The first two towers are 21 per cent complete but the rest of the project is under review. Investors in the other two towers have said they have not been informed of the status of the construction.
Many investors waited until after December to pursue legal action, because a clause in their contracts gave Tameer a six-month extension on delivery of the development, which was originally scheduled for July.
Mr Al Temimi said it would take about a month to agree on an arbitrator and a decision should be made within six months.
A second group of investors will also file soon, he said.
"As time passes, there will be more cases," Mr Al Temimi said. "It's not easy for people to keep Dh40,000 or Dh50,000 in a developer's pocket and some of these people put in Dh10 million."
Haitham Hassan, an investor who put down 30 per cent, or Dh530,000, for a one-bedroom flat, is leading a group of 75 investors. At least 20 are expected to move forward with arbitration.
Mr Hassan said many investors lost faith in the project because Tameer failed to communicate with them.
"I want the apartment but if they can't deliver it, I can't rent it and get money for it," he said. "I'm willing to drop my case if I get a reasonable response, but they don't answer."
Several other investors have won individual cases although Tameer is appealing on each.