Built to inform

Sign up for the daily newsletters

No, Thank you

Court orders Damac to refund $462k in property row

Developer appeals ruling awarding investors refund on delayed project

Damac has been ordered to repay claimants.
Damac has been ordered to repay claimants.

RELATED ARTICLES: Damac Properties' Marina Bay reaches 7th floor | Damac hits major milestone in Jeddah tower project | Damac to award contracts for Burjside Boulevard

Dubai developer Damac Properties will appeal a court ruling awarding an Irish couple an AED1.7m ($463,000) refund on an apartment delayed for more than three years, the firm’s lawyer said.

The ruling requires Damac Park Properties, a unit of the developer, to repay claimants Noel and Lorna Gaffney for an apartment purchased in Park Towers.

The building is located in the Dubai International Financial Centre (DIFC) free zone, which is regulated by a different set of regulations to the rest of the emirate. The ruling was handed down by DIFC Courts.

“This judgment has been entered on a default basis. Therefore the court has not had the opportunity to consider any points in defence or hear Damac's substantive responses to the claims,” Jonathon Davidson, managing partner of Davidson and Co, acting for Damac, said.

“Damac are appealing this judgment for the opportunity to state their case.”

The Gaffneys purchased their apartment in December 2004 on the understanding the unit would be delivered in early 2008, a lawyer for the couple said.

The claimants paid around 90%of the AED1.9m purchase price, but delivery of the unit was delayed and the tower is only now nearing completion.

The pair notified Damac Park Towers they were terminating the contract in October 2010, citing breach of contract. The developer was ordered to refund the claimants in a March 31 hearing.

The decision offered hope to real estate investors in similar situations, said the claimants lawyer

Kaashif Basit, but he warned rulings depended strongly on the contract in place.

“Each case depends on the contract and the Gaffneys had a particular contract and terms that allowed them the recourse that they sought,” said Basit, a partner at Dubai law firm KBH Kaanuun.

“It allowed them to terminate when the developer had not performed its obligations, there will be other contracts where that is not the case. But the major implication is that if you have the merits on your contract then there is recourse available,” he said.

Investors who purchased after 2008 may face difficulties as many developers amended contract terms to cater for inevitable delays as Dubai’s real estate market began to slow,” he said.

“For people who invested early on, we have seen a pattern of contracts that are more neutral between the investors and the developer,” he said.

“People who bought on the secondary markets and later, from 2008 onwards, their contracts are more biased towards the developer as by then developers caught on that they were not going to be able to deliver their commitments.”

His firm is currently bringing cases against Nakheel developments in Jumeirah Golf Estates and Jebel Ali.

Most popular


CW Awards 2018: WSP named Consultancy of the Year in Dubai
WSP emerges winner in hotly contested CW Awards 2018 category, with Aecom highly commended at


Leaders Kuwait 2018: New Kuwait 2035 needs smart city-led contracts
Localisation and contract modernisation are essential for Kuwait's diversification strategy
Construction Week's Leaders Kuwait 2018 summit opens
Speakers from Kuwait's Supreme Council for Planning and Development and CSCEC ME are at today's

Latest Issue

Construction Week - Issue 725
Jan 19, 2019