Real Estate Land

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 arabianbusiness.com 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 arabianbusiness.com 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, arabianbusiness.com noted.
You can find an in-depth analysis on Dubai property investment opportunities here.

Dimitar Bogdanov Dimitar Bogdanov
Rate this post
Total: 0 Average: 0

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.