Emaar disputes Saudi ruling

Emaar Properties has filed an opposition against Saudi Arabia's Board of Grievances ruling that reversed an arbitration award in favour of Emaar Properties in a long-drawn legal battle with the Jadawel International Company.

An Emaar statement said it is sure it has good arguments to refute any claim raised by Jadawel.

The issue dates back to late 2003 when Emaar and Jadawel signed a conditional joint venture agreement.

In 2004, Jadawel filed a dispute with the Saudi Arabian Board of Grievances (the Grievances Board) alleging that Emaar had breached the joint venture deal and had failed to implement projects under it.

Jadawel alleged that Emaar had instead pursued opportunities with another company in the kingdom.

Emaar argued that the conditions of such an agreement never materialised and the arbitrators had given an award in September 2008 in favour of Emaar in which all claims by Jadawel were rejected.

The arbitrators made it clear through the award that "the joint venture agreement was ineffective, unforceable and with no legal effect on Emaar".

Pursuant to this, Jadawel filed an appeal challenging this award before the board, which "unexpectedly" reversed the award and issued a ruling directing Emaar to pay $228 million (Dh834.4m) to Jadawel and also to deliver share certificates representing 18.610 million shares in Emaar along with the profits realised by these shares from the date of signing of the joint venture agreement which was on December 28, 2003.

Emaar was also directed to pay the arbitrator fees amounting to SR45m (Dh45m). All other items of relief claimed by the parties though were dismissed by the board. Emaar is hopeful about the turnout of the legal battle.

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