New twist in property investor's suit
A judge has ruled part of an investor's lawsuit filed against the Dubai developer Damac Properties may be heard by the Dubai International Financial Centre (DIFC) Courts.
Lothar Hardt's closely watched suit against the developer is believed to be the largest filed against a developer in the emirate.
"I think this is very important for Dubai …" Mr Hardt said yesterday. "So far everything has been left in the dark."
Mr Hardt claims he invested US$9.7 million (Dh35.6m) in five Damac projects: Park Towers at the DIFC; Water's Edge and Lotus Residences at Business Bay; Wildflower at Jumeirah Golf Estates; and Ocean Heights at Dubai Marina.
His suit charges the developer with a range of alleged infractions including failing to deliver the projects on time, mismanaging escrow accounts and failing to register transactions with Dubai's Land Department.
One of the developments, Lotus Residences, was built on land controlled by the UN, he alleges.
Mr Hardt, who was listed as a Damac "VIP investor", is asking for the return of his $9.7m as well as damages and lost profits. A Damac spokesman declined to comment.
Mr Hardt's lawyer, Ludmila Yamalova of HPL Yamalova & Plewka, believes her client will get a better hearing from the DIFC Courts than from Dubai courts. The DIFC Courts follow English common law and allow foreign lawyers to represent clients in English. Although it is registered in the DIFC, Damac argued the DIFC Courts are not the proper venue to hear the case. This year a judge agreed with Damac, rejecting the case on the grounds that the DIFC Courts does not have jurisdiction. But the new ruling seems to open the door for the DIFC Courts to hear at least part of the claim, specifically the issues involving Park Towers, which is part of the DIFC. "As to Park Towers, the claim as advanced does, on its face, allege facts which might be the basis of an argument that at least some loss and damage had been sustained by the claimants within the DIFC," the deputy chief justice Sir Anthony Colman wrote in his decision.
If the case goes ahead, it could be the first large property case heard by the courts. "The significance of the decision is that the DIFC seems more open to hearing real estate cases, at least related to the DIFC," Ms Yamalova said.
The next step is to file "an amended complaint pursuant to the judge's instructions", she said.
Mr Hardt has vowed to press his complaint against the developer. He hopes the DIFC Courts may decide his case within the next year.
The latest decision is consistent with "the new transparency" in Dubai, Mr Hardt said. "I think Dubai is on the right path and this can be discussed in the open."
Published: December 2, 2010 04:00 AM