Taaleem, the UAE's second-largest private school operator, has filed a claim against National Bonds Corporation and Deyaar Development as part of a Dh236.5 million (US$64.3m) dispute over a high-end property development. The lawsuit, filed in the Dubai International Financial Centre (DIFC) Courts, has uncovered a dispute involving high-profile players from the country's property market.
Sky Gardens, a blue glass and yellow stone 43-storey building near The Gate, was bought for Dh1.64 billion at the peak of the market in the summer of 2008 by Amlak, the Islamic home finance company. The building was split into parts with National Bonds, a savings company, and DIFC Investments, the investment arm of the centre, each buying a piece, it is alleged. The court documents state National Bond's stake was held in the name of Taaleem, the schools' operator it partially owns, further complicating the transaction.
National Bonds tried to sell the Taaleem stake to Deyaar Development, the Dubai property company, but the deal fell into dispute leaving Taaleem with a Dh236.5m tab as the building was not fully paid for, it is further alleged. None of the participants in the deal believes it is liable to pay the outstanding payments owed to First Dubai Real Estate, the building's developer - least of all Taaleem, which filed the lawsuit against National Bonds and Deyaar last month.
Taaleem claims the dispute arose when prices began to fall in late 2008 and early last year. Deyaar Development entered talks to buy the building and paid a premium cheque to Taaleem in December 2008, but as the "property market started to decline rapidly ? Deyaar started to manoeuvre to try to get Taaleem's agreement to reverse the transaction and repay the premium", the court documents allege. The building was last valued at Dh865.5m, nearly half of its original purchase price, according to last year's financial statement by Amlak Finance.
Last April, National Bonds - which had funded the acquisition of the 33 per cent stake in the building on behalf of Taaleem - "demanded payment of a sum of Dh236,595,031.07" from Taaleem on the basis that the board of directors of Deyaar did not approve the acquisition and that it had an agreement with National Bonds to be responsible for the investment, the court filing alleges. "Such an allegation is self serving, and in the premises is wrong and as a matter of fact and law," Taaleem alleged in the filing.
Taaleem is asking the DIFC Courts to declare the company is not liable for the amount National Bonds is seeking and has no interest in the property project. Deyaar Development and Al Mazaya Holding - the parent company of the developer of Sky Gardens, First Dubai Real Estate - declined to comment yesterday. National Bonds said in a statement through its law firm, Hikmat Fayad and Associates, that "so far National Bonds Corporation PJSC is not requested by any lawsuit whatsoever to pay any amounts, debts nor liabilities to Taleem nor any other entity, and we confirm that our client is not liable toward Taaleem".
bhope@thenational.ae