Nakheel Wins Legal Case over Sao Paolo Island on ‘The World’ Project

Nakheel Wins Legal Case over Sao Paolo Island on ‘The World’ Project

Troubled Dubai property developer Nakheel has won a legal battle against a development company seeking to renege on an agreement to buy an island in ‘The World’ artificial archipelago, Gulf-focused website reported. Citing a company statement released on Thursday, April 7, the news provider said that the Dubai World Tribunal has ruled in favour of Nakheel by ordering Sao Paolo Development Ltd., the British Virgin Islands-based property developer which had agreed to buy the ‘Sao Paolo’ island, to pay AED127.6m ($34.7m).

**In Nakheel’s Favour**
The judgement handed down on Thursday marks an important victory for Nakheel, which has been fighting in court to force buyers at its ‘The World’ project to go through with their purchases. The Dubai property developer said that the tribunal had ruled in favour of Nakheel, The World and others in the case against Sao Paolo Development Ltd. and Dubai-based Diamond Developers. As Nakheel pointed out, the tribunal held that the “reservation contract for The World island of Sao Paolo was enforceable and binding” and ordered Sao Paolo Development to pay the outstanding sum “to cover outstanding instalments owed on the island and accrued delay fees”. Diamond Developers was ordered to pay AED10.9 million to Jumeirah Village, a Nakheel subsidiary.

The court ruling comes in the wake of an earlier legal victory for Nakheel against Sao Paolo Development. As UAE-based The National pointed out, in that lawsuit the tribunal dismissed a claim by Sao Paolo Development suing Nakheel’s holding company and three of its sister companies for backing out of a deal to transfer the AED17.4 million payments it had made on the island into another project of the Dubai property developer.

**‘The World’ Problems**
!m[Sao Paolo Development Ltd. Ordered to Pay $34.7 Million to the Dubai Property Developer](/uploads/story/1822/thumbs/pic1_inline.png)
The global financial crisis has stalled the development of ‘The World project. Reportedly, island owners attribute much of the blame to Nakheel, stating that they have been unable to develop the man-made islands due to a lack of vital infrastructure. Some investors on the project such as the Nepalese billionaire Binod Chaudhary have openly criticised the Dubai property developer for failing to live up to its commitments made when it sold the islands to customers. Last month, Chaudhary was quoted by as saying that “[Nakheel and the developers] have to come forward to find a solution”.
Nakheel has previously made clear its position on the issue, saying that building work is the responsibility of the owners, noted.
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By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.

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