Claims on Nakheel may not go to Dubai special court

Claims on Nakheel may not go to Dubai special court

A special tribunal set up to hear disputes over Dubai World's debt restructuring may not hear cases against former unit Nakheel after the government took over the troubled property developer in August.

September 26, 2011 2:14 by Reuters

A directive released by the special tribunal said “issues as to the jurisdiction of the tribunal may arise in proceedings brought by or against Nakheel and those of its subsidiaries and affiliated that have ceased to be subsidiaries of Dubai World”.

The directive, issued on Thursday by the tribunal’s chairman Sir Anthony Evans, said the court would continue to exercise jurisdiction in proceedings that commenced before August 23.

The question of jurisdiction for claimants that have not yet been heard before the tribunal will be determined based on the applications received.

Nakheel, which was taken over by the Dubai government as part of the Dubai World restructuring plan, became embroiled in a number of legal battles as it struggled to finish a $16 billion restructuring, including a lawsuit by its former chief executive for $3.7 million.

It fought back with a series of claims against owners of islands on its World islands development, including one lawsuit against Kleindienst Properties which demands almost $200 million in unpaid installments and delay fees, according to a filing with the special tribunal.

A flurry of cases were filed in the special tribunal before Nakheel was taken over by the government amid concerns that future claims would be heard by local Dubai courts that do not abide by British Common Law. (Reporting by Shaheen Pasha; Editing by Firouz Sedarat)