Saturday, September 13, 2008

Sama Dubai refuses to comment on Lagoon Project dispute

Sama Dubai, leading real estate developer and a division of Dubai Holding, has refused to comment about the news reports that Al Arabiya, the Kuwaiti real estate firm is seeking arbitration proceedings against Sama Dubai for blocking sale of plots in the Lagoon Project to United National Bank (UNB).

The media had last week carried reports stating that Al Arabiya claimed that the deal with the Abu Dhabi-based UNB and Sama Dubai had been fixed in June.

Refusing to comment on the issue, the Executive Chairman of Sama Dubai, Farhan Farid-ooni, in his statement to The Gulf News, has been reported as saying that commenting on an investors relationship with the company, breaches the contractual agreement between the company and the investor.

Several analysts in Dubai when trying to predict the future of housing and property in Dubai during the next couple of years have predicted that a notable correction is likely.

Al Arabiya has already spent about Dh.1bn on 18 plots since 2007 at the Lagoons development in Ras Al Khor. But, last week, Sama Dubai is said to have returned payment cheques after holding them for three months, although it refused to clarify as to why the cheques were held back for so long.

Al Merri, the Chief Executive of the Lagoons Project, is under investigation, and was questioned last month.

The Kuwaiti firm, Al Arabiya, which has been listed on the Kuwait Stock Exchange, in their note to Sama Dubai, emphasized that they intend to go ahead with arbitration at the Dubai International Arbitration Center, within Dubai's Chamber of Commerce.

UNB is also considering legal proceedings, it has been said. This is another addition to the long series to cracks to appear in the fragile property sector of Dubai, which unsettles all those, interested in the market. The Police have investigated several officials of major companies such as Tamweel, Nakheel and Deyaar.

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