Former Nakheel chief tells court he didn't resign

Chris O'Donnell, pictured during his time at Nakheel. Photo: ITP library.

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Nakheel’s chief commercial officer has admitted a document suggesting former chief executive Chris O’Donnell had resigned from the company was "a mistake" during a hearing at the Dubai International Financial Centre (DIFC) Courts on Monday.

Australian O’Donnell, who ran business giant Nakheel PJSC for five years during some of its greatest but then most turbulent periods of the company’s history, is suing ‘The World’ creators for breach of contract.

The former CEO of Dubai’s Nakheel launched a legal battle against the developer when he filed a lawsuit at the Dubai World Tribunal in June, and is seeking $3.7m in unpaid dues from his former employer. The sum includes $3 million in long-term incentives as well as $290,850 related to currency fluctuations and $180,000 in interest.

In the hearings that began on Monday, O’Donnell told the tribunal a decision was made not to extend his AED400,000 ($110,000) per month deal in June of this year.

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O’Donnell’s fixed-term five-year contract expired on June 16, 2011. An email was circulated by Nakheel on June 8 saying his contract was not being extended and Mr O’Donnell was placed on ‘gardening leave’ for the remaining time.

However, O’Donnell,  told the tribunal that he had resigned from subsidiary groups of Nakheel – not from his actual position as chief executive officer of the company. He said the decision to resign from its subsidiary groups was standard practice amongst departing CEOs of his ilk.

When Nakheel’s chief commercial officer Mr Aqil Khazim was asked by O’Donnell’s counsel, Mohammed Zaman QC, at DIFC court that a document suggesting the Australian had resigned from the company was “not true”, Khazim agreed, adding “it was a mistake. It may have been overlooked. I can’t say yes or no as to whether he was dismissed. It [his contract] ended.”

When the global economy bombed dramatically, Nakheel’s fortunes went with it – the UAE-based firm plunging into some $10.5bn worth of debt. The company suffered significant cash flow problems towards the end of 2008, with resulting redundancies and the grinding to a halt of blue chip builds.

The tribunal continues.