Al Habtoor unit files suits against Qatari sheikh for over AED1 billion

(Reuters) – The Dubai arm of Australian contractor Leighton Holdings is seeking more than 1 billion dirhams ($272 million) from a prominent member of Qatar’s royal family in compensation for late payments on a hotel project in the Qatari capital.

Dubai-based Al Habtoor Leighton Group (HLG) said it had launched a series of suits against Sheikh Faisal Bin Qassim al-Thani’s Al Faisal Holding in relation to the Doha City Centre hotel development.

Al Faisal on Wednesday in its own statement accused HLG of mismanagement and a failure to take responsibility for severe delays which have afflicted the construction of several hotel towers originally planned for completion in 2007.

Khalaf Habtoor, chairman of Al Habtoor Group and part owner of HLG told Reuters that it had launched a number of separate suits against Al Faisal Holding in Doha and planned also to initiate legal action internationally.

“The company wants more than a 1 billion dirhams in compensation from Al Faisal,” he said.

He said the suits were in response to Al Faisal Holding’s decision to cash in a $100 million performance bond which the contractor had put up as a guarantee in a project planned to include Marriott, Renaissance and Shangri-La properties.

Al Thani is a relative of Qatar’s Emir, the holder of absolute power in the tiny Gulf emirate whose natural gas wealth has made it one of the world’s richest states per capita and allowed investment in a raft of major infrastructure ventures.

“Al Habtoor has been responsible for the construction of nine towers and hotels developed by AFH has developed in Qatar which have been beset by significant and prolonged delays over a number of years,” AFH said in a statement.

“It appears that constant changes in Al Habtoor’s management have led to the mismanagement of these contracts, and the responsibility for the severe delays should be addressed internally by the management team of Al Habtoor,” the statement quoted al-Thani as saying.

It also said that phase three of the City Centre expansion project had yet to be completed some eight years after HLG took possession of the site and that the contract had originally stipulated the project was to be completed two years after the contractor took possession of the site.

AFH said damages from the delay of the project are now in excess of 1.5 billion riyals ($410 million) and continue to accrue. It said there were a total of eight cases before the courts and that one of the cases Al Habtoor filed had been dismissed.