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02 February, 2008

Dubai sued for $1 billion

The announcement of the one billion dollar deal in 2005 between Capital Partners and the Dubai government was heralded as being a major move towards a free trade agreement with the US. A move which would have seen FDI - foreign direct investment - spiral upwards. But more than two years later Capital Partners is suing the Dubai government for one billion US dollars. And of course there's still no FTA:

"The developer, Capital Partners, had in July 2005 made what was planned to be one of the largest foreign investments in the region’s business hub, when it announced plans for River Walk, a mixed-use $1bn project in the busy internet business park located on prime land near the trunk of the reclaimed Palm Island.

But the deal soon turned sour amid recriminations over the legal title of the plot on which the US developer planned to build apartments, hotels and offices.


Basically, Tecom never owned the land they tried to sell, it "belonged to another government entity". Tecom claims that the contract was cancelled because Capital Partners "failed to meet the tight payment schedule".

However obviously CP couldn't legally make the next payment once they found out there was an issue with the land ownership, as they they have investors and are bound by US financial regulations.

The case is being run in the new Dubai International Arbitration Centre. But if that fails, there's always the US courts, since the Dubai government/royal family owns billions worth of assets there that could be seized if the judgement goes against them.

Of course what's extra ridiculous about all this is that every inch of sand and every government department is owned by Sheikh Mohammed and the Maktoum family, so this whole mess never needed to happen in the first place.

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16 Comments:

Anonymous Flatus said...

Alas, the River Walk would have been one of the greatests developments in Dubai, albeit a replica of the one in San Antonio.

02 February, 2008 02:34  
Anonymous Anonymous said...

Flatus, ain't ya from Tejas?

The Eyes of Texas are upon you, All the live long day...
The Eyes of Texas are upon you, You cannot get away.
Do not think you can escape them, At night, or early in the morn...
The Eyes of Texas are upon you, Till Gabriel blows his horn!

Anyha, one word comes to mind..........SUCKERS!

02 February, 2008 03:08  
Blogger nzm said...

I'd like to know what the archaeological site is - and where it is.

02 February, 2008 05:58  
Anonymous I C it All said...

A servant who has two masters, lies to one of them.

02 February, 2008 09:50  
Anonymous Anonymous said...

Hmm, a copy of the River Walk without the Alamo is not much of a site. Maybe they should recreate the Alamo in downtown Dubai?

02 February, 2008 11:10  
Anonymous Anonymous said...

This is a ridiculous case, I think there is more things behind it than meets the eye.

The issue of land is completely a non issue. The beneficiary of this land would have been the maktoum family period. Its not any govt entity that would have somehow had the money to do something with it, in the sense of what most people would assume.

All the money would simply go to the extended sheikhs family. I dont get it how varous government departments would be squabling. Whenever such things happen in other gulf countries its usually because one prince has stepped over the foot of another. Which means one prince will miss out on a superyacht, but another one will get his. tis theway it works here.

02 February, 2008 21:42  
Anonymous Anonymous said...

This is a ridiculous case, I think there is more things behind it than meets the eye.

The issue of land is completely a non issue. The beneficiary of this land would have been the maktoum family period. Its not any govt entity that would have somehow had the money to do something with it, in the sense of what most people would assume.

All the money would simply go to the extended sheikhs family. I dont get it how varous government departments would be squabling. Whenever such things happen in other gulf countries its usually because one prince has stepped over the foot of another. Which means one prince will miss out on a superyacht, but another one will get his. tis theway it works here.

02 February, 2008 21:42  
Blogger Kyle said...

It’d be interesting to read how the DIAC’s rules in this particular instance especially since every inch, like the author says, is owned by the ruling family.

I also like the generous usage of the word ‘archaeological’ in that article. It epitomizes absurdity of the highest order!

02 February, 2008 21:47  
Blogger the real nick said...

Ahh - I just realized which archeological site they mean; it's the 'Chalet' restaurant on Beach Road, established ca. 1980.

03 February, 2008 10:43  
Anonymous Bukowski said...

According to Dubai museum, there is an archaeological site in Jumeirah,around that area, a village around 3,000 years old (I think - it's a while since I did the tourist trail down there). I am surprised, though, if it still exists - my impression was that it had been concreted over a good ten years ago.

03 February, 2008 12:41  
Anonymous Anonymous said...

It's the one in Jumeirah 2, I know because I live near by, here's a link:
http://wikimapia.org/#lat=25.196826&lon=55.241758&z=18&l=0&m=a&v=2

It's just some sand to be honest :) really old sand xD

03 February, 2008 13:06  
Anonymous RR said...

secretdubai, is there a way to send you a comment in privet and not on the Blogs public comments section?

03 February, 2008 22:06  
Blogger secretdubai said...

Yes - you can email me - my username here at gmail.

04 February, 2008 00:16  
Blogger screwed.mind said...

This comment has been removed by the author.

04 February, 2008 02:28  
Blogger screwed.mind said...

No comment is better than the silliness of the story itself. Dubai Arbitration court? yeah right!! I'm desperate to see what comes out from the court more stupid than the story itself!!

We have a proverb : "One asked the fox who is normally its evidence. It said : my hairy tail!!"

04 February, 2008 02:32  
Anonymous Anonymous said...

There's another local proverb :"If you do not have AIDS, you did not get raped."
That's good to know.

http://www.gulfnews.com/nation/Police_and_The_Courts/10187033.html

04 February, 2008 21:16  

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