Dubai firm to refund $24m to developer
Dubai, October 7, 2013
A Dubai government-owned firm will refund $24.3 million to a property developer after a land deal turned sour, in a case at a special tribunal set up to settle claims against Dubai World that could help restore investor confidence in the emirate.
Nakheel World, part of government-owned Dubai World and separate to Nakheel - builder of Dubai's palm islands - will repay the money to Saudi-owned Al Falak International.
In 2011, Dubai World signed a deal with 80 creditors to restructure $24.9 billion in debt, but some claimants opted to take their case to the tribunal and about 11 have been heard this year. Resolving these cases would help restore investor confidence in Dubai following its corporate debt crisis in 2009-2010.
Lawyers for Al Falak told the tribunal on Monday that the company had reached a settlement with Nakheel World.
As well as refunding Al Falak 89.4 million dirhams ($24.3 million), Nakheel World will pay 5.71 million dirhams in interest and will be charged daily interest at an annual rate of 2.72 percent until it has repaid all money owed.
Clifford Chance, representing Nakheel World, said Al Falak's other claims for compensation totalling 66.2 million dirhams had been dismissed.
In May 2008 - near the height of Dubai's property boom - Al Falak agreed to buy a plot of land at Mina Rashid Port for 446.97 million dirhams, paying a fifth of this amount by the end of that year, according to court documents.
But it never received the land and was instead offered other properties in lieu of its deposit, prompting Al Falak to go to the tribunal. - Reuters