Chris O'Donnell v Nakheel set for New Year call

Former Nakheel chief executive Chris O'Donnell is suing the company for breach of contract

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Chris O’Donnell’s multimillion dollar claim for breach of contract against former employers Nakheel “won’t be decided before the New Year”, judges presiding over the tribunal at Dubai International Financial Centre Court have announced.

The former CEO of Dubai’s Nakheel is suing ‘The World’ creators for breach of contract. O’Donnell, who it was revealed during the tribunal earned AED28m ($7.6m) during his five year spell at the helm of 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 $3m in long-term incentives as well as $290,850 related to currency fluctuations and $180,000 in interest.

A decision on the tribunal was expected at on Tuesday but won't be made until early 2012.

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Australian 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 and said the decision to resign from its subsidiary groups was standard practice amongst departing CEOs of his ilk.

In the hearings that began on Monday, Nakheel’s chief commercial officer Aqil Kazim admitted on oath a document suggesting former chief executive Chris O’Donnell had resigned from the company was "a mistake.”

When Nakheel’s chief commercial officer Mr Aqil Khazim was asked by O’Donnell’s counsel, Mohammed Zaman QC, 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.”

In summations at court on Tuesday, Mr Zaman QC said: “The party line for Nakheel has been that he wasn’t resigned, wasn’t dismissed but in effect resigned.”

O’Donnell also vehemently denied a claim made by Nakheel’s counsel that in the early part of this year he agreed to waive the payments he is now legally seeking in return for a year’s contract extension on a “reduced salary” and with the option of a subsequent year’s extension.

With regards to the terms of O’Donnell’s five year contract, Mr Zaman QC said: “He knew his contract entitlement.

“The only way he could destroy that (entitlement) was in fact if he resigned or in fact he was dismissed.”

When the global economy bombed dramatically, Nakheel’s fortunes went with it – the UAE-based firm plunging into some $10.5bn worth of debt.

O’Donnell admitted Nakheel’s cash flow “stopped significantly” in November, 2008, with the resulting redundancy of some 500 people at the company shortly afterwards.

Prestigious builds then ground to a halt as Nakheel, its then parent group Dubai World and the emirate itself felt the full effects of the devastating world economic crisis.