Former CEO wins lawsuit against Nakheel, awarded $3 million

Nakheel’s former chief executive won a lawsuit for breach of contract against the indebted developer on Thursday and was awarded $3 million in damages by a Dubai court.

Chris O’Donnell, who left Nakheel last June after five years as chief executive, had sued the developer for $3.7 million in lost incentives, entitlement fees, interest, exchange rate losses and salary-related claims.

He also sought a business class airline ticket from Dubai to Australia.

The Dubai World special tribunal rejected the interest and airfare claims but awarded O’Donnell $3 million for long-term incentive payments.

An additional amount of about 916,000 dirhams ($249,400) was also awarded for lieu days during his stint.

O’Donnell was heading Dubai’s flagship firm when a collapse in property prices forced Nakheel into a $16 billion restructuring. The company wrote down over $21 billion in property assets.

O’Donnell’s annual salary amounted to around 4.8 million dirhams during this time, the court heard in one of its earlier sessions.

“Whilst I have been entirely vindicated by the Dubai World Tribunal, I am naturally disappointed that ... the matter was not able to be resolved amicably without the need to take costly legal proceedings that vented Nakheel’s internal business in a public forum,” O’Donnell said in a statement after the verdict.

Nakheel’s lawyers said the case should have been first brought to the ministry of labor but considered rejection of certain additional costs as “a good result.”

Nakheel, the ambitious developer behind palm shaped man-made islands, was at the center of Dubai’s 2009 debt crisis when it was owned by flagship conglomerate Dubai World. The government took over Nakheel in 2011 as part of Dubai World's $25 billion debt restructuring agreement with banks.

($1 = 3.6730 UAE dirhams)