Dubai's Nakheel Fighting $13 Million Contractor Claim

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(DUBAI, UAE) -- The news wasn't good yesterday for Nakheel which is fighting a contractor's claim for $13.3 million in special court set up by the Dubai International Financial Centre (DIFC) to resolve disputes related to the restructuring of Dubai World. At the beginning of the hearing, the chairman ordered Nakheel to pay legal costs for Construction Delivery Group (CDG) because its lawyers hadn't complied with procedures.

The Dalmook Mohammed Dalmook (DMD) firm was told by court chairman Sir Anthony Evans that practitioners should be prepared. As quoted in today's The National paper, Sir Anthony said, "The first requirement is that they should learn what the rules say, secondly that they should take care to comply with them, and thirdly they should give full consideration to any steps taken before the court."

CDG has a facilities management contract with Nakheel for 1200 homes on Palm Jumeirah. The company claims it hasn't been paid since 2008 and is owed $13.3 million. This is the biggest legal claim among 17 cases filed at the DIFC court that total nearly $54 million.

Dubai World's bank creditors settled their claims in a restructuring plan last month. The companies now trying to settle have been offered 40 percent in cash and 60 percent invested in an Islamic five-year bond that pays 10 percent per year.

Most contracts made with Nakheel include an arbitration clause. However, it was removed from the CDG contract which apparently led to DMD's problems with procedure. As a result, Nakheel will have to pay costs for CDG's lawyers from September 7 - October 7.
 
 

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