The builder of a delayed luxury development in Dubai has invoked a so-called "act of God" clause to refuse refunds to buyers.
Shaikh Holdings last week informed owners in Sanctuary Falls, a collection of 96 villas under construction in Jumeirah Golf Estates, that the company was not liable for penalties for delays due to "force majeure", or unforeseen circumstances, and citing events "outside our control".
Most sales contracts on new developments include the phrase force majeure, which typically refers to acts of nature, such as flooding, earthquakes or volcanic eruptions.
There have not been any floods, earthquakes or volcanic eruptions in Dubai, but developers in the emirate are increasingly trying to use a broader definition of the clause to excuse project delays. Force majeure has been invoked to cover anything from the financial crisis to problems with contractors, lawyers say.
"It's the mechanism of choice for developers to justify a project on hold," said Michael Lunjevich, a partner with Hadef & Partners, the law firm.
In Sanctuary Falls the delays have been caused, according to a letter to owners from Shaikh Holdings, by the inability of the master developer, Nakheel, to complete work on the electricity, water and other infrastructure. Nakheel halted work on Jumeirah Golf Estates and a wide range of projects last year when it moved to restructure US$24.9 billion (Dh91.45bn) of debt.
"Events have occurred that are outside our control and therefore we are not liable for any penalties in these circumstances," the developer said in the letter to owners, citing the force majeure clause.
In a statement to The National, Imran Shaikh, the chief executive of Shaikh Holdings, said: "We are doing whatever we can in our discussions with Nakheel and the relevant authorities to complete the development."
Suresh Vyas, who bought a villa in Sanctuary Falls in 2007, says he is "disheartened" by the developer's use of force majeure. He has paid Dh6.1 million of the Dh7.7m owed on the villa.
He was refused a refund when the project did not meet the "extended completion date" last month.
"I should have the choice if I don't want the villa," Mr Vyas said. "They should live up to the contract."
Blaming the infrastructure issues is "fair enough", but the problems are "between the builder and Nakheel and they should compensate people", said Mr Vyas, who is renting a home for his family.
More than 700 homes in Jumeirah Golf Estates have been affected by the infrastructure issues. In Lime Tree Valley, a development of 121 villas on the estate, construction on the homes was completed months ago, but buyers have not been able to move in until the infrastructure is finished.
Nakheel expects to restart work on the project in "early 2011", a spokesman said.
Using force majeure to cover delays by the master developer is a complicated legal issue, lawyers say. Force majeure is "a fairly tight clause, at least in international law", said Ludmila Yamalova, a partner in HPL Yamalova & Plewka, a law firm based in Dubai. "Here, many use it to include everything and the kitchen sink."
Some developers have argued that force majeure includes the financial crisis, but the Dubai courts have disallowed that reasoning, Ms Yamalova said. Blaming infrastructure issues might also be a stretch, she said.
"The property should never have been launched or sold without the infrastructure in place," Ms Yamalova added.
The Sanctuary Falls contracts typically include specific wording about forces "outside the control of the developer", said Mr Lunjevich, who has reviewed one of the contracts. But if the developer has not completed construction on the homes, it might find it difficult to blame the master developer for the delays in handovers, he said.
In the letter to owners, Shaikh said it was "unable to confirm a completion date" for villas but remained "completely committed to delivering the Sanctuary Falls project".
kbrass@thenational.ae
EDITOR'S PICK - When is a flood not a flood? That's the question Australian victims are now facing with their insurance claims.
Roll of honour
Who has won what so far in the West Asia Premiership season?
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
West Asia Cup - Winners: Bahrain; Runners up: Dubai Exiles
West Asia Trophy - Winners: Dubai Hurricanes; Runners up: DSC Eagles
Final West Asia Premiership standings - 1. Jebel Ali Dragons; 2. Abu Dhabi Harlequins; 3. Bahrain; 4. Dubai Exiles; 5. Dubai Hurricanes; 6. DSC Eagles; 7. Abu Dhabi Saracens
Fixture (UAE Premiership final) - Friday, April 13, Al Ain – Dubai Exiles v Abu Dhabi Harlequins
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Sunday's games
All times UAE:
Tottenham Hotspur v Crystal Palace, 4pm
Manchester City v Arsenal, 6.15pm
Everton v Watford, 8.30pm
Chelsea v Manchester United, 8.30pm
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
Fixtures
Wednesday
4.15pm: Japan v Spain (Group A)
5.30pm: UAE v Italy (Group A)
6.45pm: Russia v Mexico (Group B)
8pm: Iran v Egypt (Group B)
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
THE SPECS
Engine: 2.0-litre four-cylinder turbo
Transmission: eight-speed automatic
Power: 258hp at 5,000-6,500rpm
Torque: 400Nm from 1,550-4,400rpm
Fuel economy, combined: 6.4L/100km
Price, base: from D215,000 (Dh230,000 as tested)
On sale: now
Kill%20
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Nikhil%20Nagesh%20Bhat%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3C%2Fstrong%3E%3A%20Lakshya%2C%20Tanya%20Maniktala%2C%20Ashish%20Vidyarthi%2C%20Harsh%20Chhaya%2C%20Raghav%20Juyal%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204.5%2F5%3Cbr%3E%3C%2Fp%3E%0A
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
If you go
The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at.
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.
Founder: Ayman Badawi
Date started: Test product September 2016, paid launch January 2017
Based: Dubai, UAE
Sector: Software
Size: Seven employees
Funding: $170,000 in angel investment
Funders: friends
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