!The Challenge
A group of 12 international investors had paid a combined AED 45M for off-plan units in a Dubai development that the developer had failed to deliver within the contractual timeline. The developer claimed force majeure and construction delays. The investors' SPAs were governed by UAE law but contained a DIFC Courts jurisdiction clause. RERA had issued a show-cause notice to the developer but had not cancelled the project registration.
⚙Our Approach
GSDA pursued a dual-track strategy: filing a claim in the DIFC Courts under the SPAs' jurisdiction clause while simultaneously engaging with RERA's dispute resolution committee. We obtained an interim freezing order from the DIFC Courts over the developer's escrow account, preventing further drawdowns. We then negotiated a structured settlement that gave investors the choice between unit delivery on a revised timeline with penalty compensation, or full refund from the escrow account.
✓The Outcome
9 of 12 investors elected full refund and received AED 33.7M from the escrow account within 60 days. 3 investors elected revised delivery with AED 4.2M in aggregate penalty compensation. The DIFC Courts freezing order was instrumental in preserving the escrow funds.
Key Takeaways
- 1DIFC Courts freezing orders are the most effective tool for protecting off-plan investor funds in Dubai
- 2Dual-track RERA engagement and court litigation creates maximum negotiating leverage
- 3Escrow regulation enforcement is critical — developers often seek premature escrow releases