Tameer owners locked in legal dispute

A Dubai court last week put a freeze order on some assets belonging to the Saudi chairman of UAE developer Tameer, a lawyer for the firm's other owner said on Tuesday, adding a claim for specific damages was pending.

The row is the latest in a number of legal wranglings to hit Dubai's once-booming property sector.

The court granted the request from Omar Ayesh, the firm's former chief executive, who alleges Tameer Chairman Ahmad Al Rajhi did not fully pay for his stake in the company.

Rajhi owns 75 per cent of Tameer, while Ayesh – who stepped down as CEO in May 2008 and is himself the subject of legal cases brought against him by the company – owns the remaining 25 per cent, Tameer Chief Executive Federico Tauber told Reuters.

"Rajhi paid in full," Tauber said, adding that this dispute was at a shareholder level and would not affect Tameer's operations. Tauber confirmed the freeze.

Tameer's $8.2 billion Al Salam City project is on hold due to the economic slowdown.

Ayesh's lawyer, Habib al-Mulla, told Reuters his client's request for the court to freeze Al Rajhi's assets would be followed within days by the filing of a court case that would include a claim for damages.

Mulla said Ayesh wants Rajhi to pay fully for his stake as well as repaying dividends and any profits he earned on them.

"The whole point of the injunction is for it to take the person by surprise, so they can't withdraw their assets," Mulla said.

Al Rajhi said in an emailed statement that he "remains confident that the claim will be dismissed by the Dubai Courts, as it has no merits as evidenced by previous courts decision."

Dubai's once heady property market is mired in malaise after the speculative cash that fuelled its six-year boom dried up late in 2008, with more conservative western investors preferring mature markets with greater transparency and regulation.

Dubai has been hit by a number of high-profile corruption cases recently. Last week, the chairman of Dubai Holding's property division was ordered by a Dubai watchdog to face questioning over suspected wrongdoings.