The Dubai World Tribunal ordered Nakheel, the developer of the World project, on Tuesday to repay over Dhs57 million to investor Shokat Mohammed Dalal in a property dispute case.
The case was lodged by Dubai-based businessman Dalal, who paid Dh57 million to Nakheel in May/June 2008 to reserve three islands on The World development.
Dalal claimed that Nakheel did not develop the infrastructure on the islands as promised, and demanded a refund. However, Nakheel claimed that Dalal was obliged to complete his purchase of the plots.
In a ruling on Tuesday, the tribunal said: “The respondents have not established that The World LLC and Mr Dalal entered into an agreement in May/June 2008 (or at all), orally or by conduct for the sale and purchase of the three island plots.
“In the Tribunal’s view it is plain that The World LLC never intended to commit unconditionally to the sale of the island plots.”
Judge Sir John Chadwick, presiding over the case, also gave the defendants (Nakheel) additional time to submit a written document regarding the interest charges in the case.
He also ruled that Nakheel was not obliged to pay the principal amount immediately.
Dalal’s lawyers said they were very pleased with the outcome of the case.
Sir Anthony Evans, Chairman of the Dubai World Tribunal agreed that there had been a “breach of duty”, but dismissed Nakheel’s claim as being “mischievous” and without “merit whatsoever”.
The Dubai World Tribunal was set up by the Dubai government to oversee cases relating to the restructuring of Dubai World and its subsidiaries. The tribunal includes three judges, Sir Anthony, Sir John Chadwick and Judge Hwang.
In 2011, a number of investors had put their islands for sale, but it is not known whether any island was sold in the secondary market.
Earlier this year, an oyster-shaped islet, part of the Asia Island on The World project, was put for sale in the secondary market for Dh105 million.
Nakheel said in July 2011 it was working on finalising prices for islands on its The World project, as investor interest is perking up once again.
According to the company website, The World has five different types of island community: Estate Islands, Mid Density, High Density, Commercial and Transportation, and Resort Islands.
There are 25 “estate islands” ensure maximum privacy for the inhabitants, allowing open vistas to large water bodies.
The 198 mid- and high-density islands, will provide multi-family residential developments offering low-rise mixed-use communities, complete with commercial offerings to meet the needs of residents, for full-time or vacation home.
Twelve islands have been dedicated for commercial use, and will be located adjacent to the four major transportation hubs and navigation channels.
The company has maintained that 70 per cent of the 300 islands have been sold, while the remaining islands are still with them.
The World islands were sold by invitation only. The islands were initially priced in the range of $20 million (Dh73.4m) to $50m.