May 4, 2009 / 4:18 PM / 10 years ago

Dubai ruling family deny claims in $1.9 bln suit

DUBAI (Reuters) - Lawyers for members of Dubai’s ruling family denied Monday all claims made by an Iranian businessman who is seeking $1.9 billion (1.2 billion pounds) in compensation for the alleged seizure of his company.

The Dubai-based claimant, Shahram Abdullah Zadeh, filed the suit in March alleging that his business had been taken over by Sheikh Hasher Maktoum al-Maktoum and his son and daughter, according to case documents obtained by Reuters.

The civil suit is likely to be closely watched in Dubai, home to many Western banks and a regional business hub.

Last year, as Dubai’s real estate market boomed, the emirate launched an anti-corruption campaign that led to several well-known business figures being arrested.

The lengthy detention of some of these figures has been criticised by rights groups.

The financial crisis, in its turn, has triggered an increase in corporate litigation cases, some involving foreign investors.

At Monday’s hearing, the third in the case, lawyers for the defendants presented a written statement to the court as the first response to the lawsuit after they asked in April for more time to prepare.

Defence lawyer Sameer Jaafar told Reuters in a telephone interview it was “evident the case was baseless” and denied all the claims against Sheikh Hasher.

“We deny that Shahram is the investor in the company. Sheikh Hasher has invested in the company,” Jaafar said, declining to give any more details.

Zadeh is also suing Al Fajer Real Estate LLC, which he claims to have set up using his own capital.

Court documents show Sheikh Hasher had sponsored Zadeh in line with United Arab Emirates law which requires foreigners to have a UAE national as a partner or sponsor to conduct business.

Zadeh alleged Sheikh Hasher and his daughter “seized all the company has from cash monies, movables, properties, and others” in March last year, according to case documentation.

Zadeh told Reuters the seizure occurred while he was held in custody by Dubai police.

“I was arrested for 60 days on Feb 21, 2008, without access to a lawyer and until this day I don’t know what law I have broken, and I have not been charged with anything,” Zadeh said.

“The documents submitted by the defence do not reply to the lawsuit... that I am the sole investor and he is the sponsor.”

Editing by Robert Woodward

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