Hogan Lovells, an international law firm, is suing a Kuwaiti developer for US$155,711 (Dh571,900) of allegedly unpaid fees related to a sukuk offering, according to documents filed in the Dubai International Financial Centre Courts. Abyaar Real Estate Development, a publicly traded company that has 13 projects in Dubai, planned to offer a sukuk in 2008. Hogan Lovells was contracted by Barclays Capital and National Bank of Dubai to handle the legal arrangements for the offering at a cost of up to $225,000, court documents show.
After preparing the documentation, Hogan Lovells was allegedly directed to make a "complete overhaul of the structure" of the transaction from a sukuk to a private placement with a single investor. But on October 8 2008, the law firm read an article in a local newspaper saying the offering was not going forward, court documents show. Officials at the banks involved with the transaction informed Rahail Ali, the partner at Hogan Lovells, that the sukuk was "not dead, but 'for good book-keeping, settling expenses incurred to date [was] not a bad policy'," court documents show.
Hogan Lovells sent an invoice to Abyaar seeking $290,711 for professional charges and other fees on October 19, 2008, but later agreed to give the company a discount of about $12,000, court documents show. The fee was not paid within the 14-day notice period and Hogan Lovells agreed to lower the fees to the original contract amount of $225,000 and allow Abyaar to pay over 10 months ending on November 1 last year. It received six of these payments, but they allegedly stopped being transferred in August last year, court documents show.
Abyaar executives declined to comment when contacted this week. In Abyaar's financial statements for the first quarter of this year, it disclosed it was "unable to meet its murabaha and istisna'a payment obligations and amounts payable to a third party" of more than 63 million Kuwaiti dinars (Dh792.4m). Abyaar said it had hired a financial adviser and entered discussions with lenders to reschedule debts.
This week, the company announced it had sold 50 per cent of a development in Dubai to an unnamed Emirati investor. @Email:email@example.com