Dubai - The company clarified that the subsidiary was the subcontractor nominated by the main contractor to carry out works for a major project in Dubai.
Published: Thu 28 May 2020, 11:38 AM
Updated: Thu 28 May 2020, 1:44 PM
Property developer Union Properties (UPP) on Thursday said one of its subsidiaries has initiated an arbitration procedures to claim Dh1.5 billion against a main contractor which can take 18 months for the final verdict to be delivered.
The Dubai-based company clarified that the subsidiary was the subcontractor nominated by the main contractor to carry out Mechanical Electrical and Plumbing (MEP) works for a major project in Dubai. The project was delivered mid-2009. Following the delivery of the project, a dispute between the UPP subsidiary (as subcontractor) and the main contractor arose over certain variations to the works completed by the subsidiary and for which the subsidiary was due on certain payments.
"The arbitration proceedings are ongoing before one of the most prominent international arbitral institutions in the emirate of Dubai. As per the tribunal timetable for this case, the proceedings are to continue for around 18 months until the end of 2021 where the tribunal is expected to issue its final award," it said in a statement sent to Dubai Financial Market, where it is listed.
The developer didn't disclose the name of the main contractor involved in the legal dispute.
The UPP is being represented in these proceedings by one of the largest American law firm with a proven track record in similar cases and international arbitration In the event that the subsidiary is able to obtain a successful award in this case.
"Whether for the full claim amount or less, it is obvious that this will reflect very positively on the financial position of both the subsidiary as well as on Union Properties being the parent company of the subsidiary," it said in the statement.
The developer said several prolonged negotiations from the time the dispute arose took place with a view to amicably settle the claim of the subsidiary, but these did not lead to an acceptable solution to all parties. Therefore, the management considered that, in light of the unsuccessful previous negotiations which reached a deadlock, it was in the best interest of the company and the shareholders to pursue the recovery of the subsidiary's dues by initiating arbitration procedures.
-waheedabbas@khaleejtimes.com
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