Dubai's Deyaar awarded judgment in Limitless land dispute case
Listed developer says sales and purchase agreements to be terminated; Limitless to pay dues for breach of obligation
Dubai Financial Market-listed (DFM) Deyaar Development said the Court of Appeal had issued a judgment in its favour in a case against fellow UAE property company Limitless, with the move confirming Dubai Court of First Instance’s judgment to terminate all sales and purchase agreements of lands under dispute between both firms, as well as to “return all amounts paid against the price of the lands and a compensation”.
Deyaar revealed Court of Appeal's decision in a DFM missive on 19 September 2019, and explained in a follow-up announcement on the bourse that it had previously paid $112.1m (AED412m) for the land plots, representing 50% of their total purchase price.
According to Deyaar’s latest announcement, Limitless has been ordered to return all amounts paid by Deyaar against the price of the land, in addition to a legal interest at a rate of 9% per annum of the amount from the date of the claim, 4 August 2015, until full payment.
Deyaar added: “The judgment also obliged Limitless to pay […] Deyaar an amount of $16.6m (AED61.1m) as a compensation for the damages due to Limitless’s breach of its obligations.”
The Dubai-listed developer said the execution of the judgment was under process and that it had “not yet collected any amounts”.
Undersigned by Deyaar’s general counsel and board secretary, Amer Al Zoubi, the company's latest DFM missive added: “The impact of the judgment on the financial position of the company and the timing for such [an] impact to reflect in the financial statements depends on the collection of the awarded amounts, and the rejection of any appeal against the judgment by Cassation Court, in case that judgment was challenged by Limitless.”
Limitless is described as “Nakheel’s sister company” in a web statement issued on 18 June 2019 by the Palm Jumeirah developer.
Construction Week has approached a representative of Nakheel for Limitless’s view on the judgment, and will report if and when a response is received.
Deyaar said in a bourse missive on 20 September 2018 that rumours circulated on social media at the time, claiming that Deyaar had won a court case against Nakheel, were inaccurate.
Its bourse statement in September 2018 explained that while Deyaar had no court cases against Nakheel, it was awaiting a decision on a court case against Limitless.
THE UAE’s LEVELS OF COURTS
The UAE adopts three levels of courts for litigation purposes, allowing the affected party to challenge the case and present more evidence within the provisions of the law. The courts' degrees in the UAE are:
- Court of First Instance (federal and local)
- Court of Appeal (federal and local)
- Federal Supreme Court (at the federal level) and the Court of Cassation at the local level of the emirates which have independent judicial departments
According to the UAE Government’s official portal, u.ae, if the ruling of the Court of First Instance is not satisfactory, it can be challenged before the Court of Appeal and then the Court of Cassation according to the provisions of Federal Law No. 11 of 1992, as amended by Law No. 10 of 2014 concerning the Civil Procedural Law.
The Court of First Instance is the first degree of litigation and has the jurisdiction to hear all civil, commercial, administrative, labour, and personal status lawsuits. Its jurisdiction “includes examining statement of claims, authentication of documents, all urgent matters related to disputes among the people and safeguarding their rights”, and it “is also in charge of enforcing judicial execution deeds, as well as executions by deputation or reference”, u.ae explains.
The Court of Appeal is the second degree of litigation which entitles the litigant affected by the Court of First Instance to appeal his/her case before a higher court in accordance with the provisions of the civil and criminal procedural laws effective in the UAE.
U.ae explains: “Only the convicted may appeal the court judgement. Thus, appeal is not possible to anyone who accepts the ruling explicitly or implicitly.
“The time limit to challenge a ruling starts from the day following its issuance, unless the law provides otherwise. The time limit for appeal shall be 30 days unless otherwise provided by the law, and 10 days in urgent cases. The failure to observe the time limits of appeal in the judgements results in the extinguishment of the right of appeal.”
Finally comes Court of Cassation, the higher judicial body with “the power to try cases contested by the Court of Appeals”, u.ae explains, adding that the Court of Cassation “supervises the interpretation of laws and its proper enforcement”.
U.ae adds: “At this court, litigants may appeal only on points of law alone, such as violation of law or on erroneous application or interpretation. The appeal must be filed within 60 days of the judgement of the Court of Appeal if the value claimed in the action exceeds AED 200,000 or cannot be evaluated.
“All decisions of Court of Cassation are final and binding and are not subject to appeal.”