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Court upholds AED1.7m refund in Damac project row

Damac ordered to refund couple after project delay of over three years

The twin Park Towers project in Dubai's DIFC district. Photo: ITP.
The twin Park Towers project in Dubai's DIFC district. Photo: ITP.

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A Dubai court has upheld a decision awarding an Irish couple an AED1.7m ($463,000) refund from developer Damac Properties on an apartment delayed for more than three years, the claimants’ lawyer said on Sunday.

DIFC Court dismissed an appeal by Damac Park Properties, a unit of the Dubai developer, to overturn an April 14 judgement in favour of Noel and Lorna Gaffney.

The developer was also ordered to pay the Gaffney’s legal costs of AED200,000 within 14 days of the judgment.

The ruling may spur a rash of similar legal cases against the developer, the claimants’ lawyer Kaashif Basit said.

"I am absolutely delighted for the Gaffneys with this result. I very much hope that for a change Damac will now be sensible and sit down to reach an amicable settlement in the several other similar cases that we have in the pipeline,” Basit, a partner at law firm KBH Kannuun, said in a statement.

The couple has sought a refund on an apartment purchased in Park Towers, located in the Dubai International Financial Centre (DIFC) free zone.

The DIFC is governed by a different set of regulations to the rest of the emirate.

The Gaffneys purchased their apartment in December 2004 on the understanding the unit would be delivered in early 2008, Basit 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 decision offered hope to real estate investors in similar situations, said Basit, but he warned court 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,” he said.

“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.”

Damac’s legal representative said the firm was considering whether to appeal the ruling.

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