Tribunal hears Drydocks fraud case

Drydocks World has filed a court claim alleging it was defrauded by Auld Alliance Trading.

Drydocks World alleges a project management team seconded by Auld Alliance did not add value to its profitability or productivity.
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Dubai's Drydocks World, which operates the largest ship repair and construction port in the Middle East, has filed a court claim alleging it was defrauded by a local company.
The case before the Dubai World Tribunal came in response to an earlier charge brought against Drydocks World by Auld Alliance Trading. That company had claimed Drydocks World owed it Dh3.6 million (US$980,072) in unpaid bills for the services of four of its employees.
Drydocks World alleges a project management team seconded by Auld Alliance "had no added value whether in terms of profitability or in terms of productivity".
It further alleged it appeared to have been "a victim from a big operation of fraud orchestrated by [Auld Alliance] with the complicity of some former employees of [Drydocks World]" and reserved the right "to file a criminal lawsuit against all involved in the scheme to defraud and embezzle", according to tribunal documents.
A lawyer for Auld Alliance denied the charges yesterday.
"The allegation of fraud made by Drydocks World against Auld Alliance Trading is totally denied and rejected," said Adrian Chadwick, a partner at Hadef and Partners in Dubai.
"A legal notice will shortly be sent to Drydocks World demanding that the allegation of fraud be withdrawn [and] retracted, failing which [Auld Alliance] reserves the right to take appropriate action to protect its position and reputation," he said. "The allegation appears to be made by Drydocks World in an attempt to avoid paying sums contractually due to [Auld Alliance] pursuant to a valid agreement between Drydocks World and [Auld Alliance]."
The allegations are some of the most inflammatory to come before the Tribunal since it was set up in 2009 to handle cases relating to Dubai World.
The conglomerate, which counts Drydocks World among its numerous subsidiaries, this year completed a $24.9 billion debt restructuring.
Auld Alliance, which works on oil and gas processing plants installed on ships, had sought payment for the services of employees seconded to Drydocks World early last year.
In its original claim, Auld Alliance said it provided four managers who were to be paid by Drydocks World for a year.
They were to cover engineering, procurement and construction on two ships.
Payments arrived for the first four months of the contract, according to Auld Alliance's claim, but Drydocks World failed to pay anything thereafter.
On August 19, Drydocks World ordered the project management team "to abruptly leave the premises by 5pm on that day" and "without any prior notice or justification", the Auld Alliance claim says.
In its response, Drydocks World cited an investigation by government auditors in Dubai as bearing out claims of fraud, saying a report from last year found Auld Alliance sent a project management team to Drydocks World even though it "does not operate in the fields of ships' architecture and design". Where Auld Alliance did carry out work, Drydocks World says, it was "marred with mistakes".
Moreover, it alleges, there is evidence two of the people Auld Alliance sent to work for Drydocks World were "not involved in the projects that they were supposed to cover" and were paid a "substantial amount for doing nothing, or if they did anything it was marred with mistakes".
In addition to denying the charges, Drydocks World made a counterclaim before the Tribunal, asking for the return of the Dh1.7m it already paid to Auld Alliance, plus interest and court costs.
Drydocks World lawyers did not return a request for comment.