The Malaysian contracting company WCT on Wednesday won its long-running dispute with the developer Meydan Group over the construction of the Nad Al Sheba racecourse in Dubai.
WCT said that it had been awarded by the Dubai International Arbitration Centre (Diac) a final settlement in the case worth Dh1.1 billion, as well as arbitration costs of Dh8.2 million and legal costs of Dh26.7m.
The Malaysian group and its 50-50 joint venture partner Arabtec were awarded a Dh4.6bn contract to build the racecourse by Dubai-based Meydan Group in 2007. The contract was due for completion in October 2009.
However, in December 2008 the joint venture was told by Meydan that its contract had been cancelled, with the developer citing “non-adherence to the agreed time schedule for construction”.
Meydan also recalled performance bonds and continued to work with subcontractors to have the course completed.
The venture partners disputed Meydan’s claims and lodged a case with Diac in January 2009. They issued a claim for Dh2.8bn – of which WCT sought half. Meydan issued a Dh3.5bn counter claim against the pair in 2012.
Arabtec withdrew from legal action in February 2013, stating that it was working towards “an amicable out-of-court settlement” with Meydan. WCT persisted, and the tribunal has issued an award in its favour.
WCT said that the ruling found that “Meydan’s cancellation and purported termination of the contract was unlawful, invalid and of no effect”.
The settlement covers WCT’s claims for the amount of work done, the repayment of its performance bond, plus loss of profit, damages and interest.
Diac is a non-profit body that was set up by the Dubai Chamber of Commerce in 1994 to rule on commercial disputes.
It was set up to resolve disputes in a more cost-effective manner than by pursuing cases through courts.
mfahy@thenational.ae
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