Kuwait Real Estate News
Al Arabiya seeking arbitration proceedings against Sama Dubai
Al Arabiya Real Estate Company in Kuwait is seeking arbitration proceedings against Sama Dubai, following the sale of plots in the Lagoon project to Union National Bank, by the government-linked developer.
The case will be another blow to the nervous Dubai property market, which is currently reeling from a spate of high-profile detention and false allegations, majority of which are from the property sector. Little has been done to probe into the corruption.
In the meanwhile, Analysts predict a correction to the house prices within the booming emirate, which has brought several riches to many investors, but the middle-class expatriate workforce, are being squeezed with rents soaring.
The Kuwait-based property company claims that it had agreed terms of the deal with Sama Dubai, a part of Dubai Holding conglomerate owned by Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai.
Al Arabiya RE has spent about Dh.1bn on the 18 plots it acquired in summer 2007 at the Lagoons development in Ras Al Khor area of Dubai.
The master developer of the project, Sama Dubai, in its letter last week, signed by the Company Chairman Farhan Faraidooni, had told UNB that it has not given approval, and also returned payment cheques to UNB, which it had been holding for nearly three months.
Al Arabia RE and UNB mutually agreed to the transfer few months ago, and people familiar with the matter say that the seller does not require Sama’s approval. The contract stipulates that the buyer be “credible”.
Sama Dubai has refused to explain the reason for the three-month delay. The Chief Executive of the Lagoon project, Abdulsalam al-Marri is one of the staff detained in late August on suspicion of fraud by anti-graft investigators.
Eversince the stand-off commenced, Al Arabiya RE has been approached by several third parties suggesting that an ‘irregular’ payment will hasten the sale, which the company had refused.
The Kuwaiti real estate company, has reportedly sent notice to Sama Dubai that going by the contract, it intends to proceed with arbitration proceedings at the Dubai International Arbitration Center in the Chamber of Commerce of the emirate.
UNB is also said to be considering legal action. Al Arabiya RE is controlled by Bukhamseen family and is listed on the Kuwait Stock Exchange, and has extensive hospitality interests in UAE and Kuwait. The company plans to develop eight hospitality plots at the Lagoons project.
An extensive investigation into allegations of fraud and corruption at the Dubai Islamic Bank has spread across the emirate, and executives at other government-linked companies have been detained, including Deyaar and DIB’s real estate affiliate and coastal offshore developer Nakheel.
Social Bookmarking
Read more news
> Property markets in GCC region to remain pressurized in 2012
> Kuwait property sector gathers pace following summer slowdown
> Kuwait realty sector post profits
> Kuwait records decline in expat count
> KAMCO report reveals positive indicators for Kuwait realty sector
> Majority of Kuwaitis investing in Dubai properties
> Latest Kuwait property sales report indicates improvement in the sector
> Increased demand for properties in Kuwait realty sector
> Property experts seek private sector support to develop housing sector
> KFH launches promotional campaign to finance residential real estate