According to press reports, the Dubai World-owned property developer has axed around 50 jobs.

However, a spokesperson for Nakheel would not confirm numbers, but said the staff cuts were part of Nakheel’s “restructuring process”.

The spokesperson added: “As part of the restructuring process Nakheel will continue to readjust its current business objectives to accommodate current market conditions. In doing so, the company also evaluates resource restructuring to ensure efficiency and optimisation of skill and talent.”

The move comes weeks after Nakheel announced plans to pay its creditors which are owed AED500,000 or less.

Earlier this month, Arabtec confirmed that it had received the first payment of AED500,000 from Nakheel.

Nakheel said partners owed bigger amounts were ongoing. Creditors with outstanding sums worth more than AED500,00 have been offered a full repayment, comprising 40 per cent in cash and an Islamic bond.

A spokeswoman for Arabtec confirmed the payment, but declined to comment further.

The payment comes after Nakheel said earlier this month that it has started paying its creditors, which are owed AED500,000 or less.

A spokeswoman for Dubai World’s property division said partners owed bigger amounts were ongoing. Creditors with outstanding sums worth more than AED500,00 have been offered a full repayment, comprising 40 per cent in cash and an Islamic bond issued by a Cayman Islands special purpose vehicle company.

Last week, The Dubai World Tribunal said it will establish expert panels if the number of claims brought against Dubai World and its subsidiaries dramatically increases.

Some 22,000 cases are rumoured to land with the special tribunal despite the tribunal only receiving two to date – one employment claim and another filed against Nakheel by Trinet Outdoor Advertising.

However, Mark Beer, DIFC Courts and Dubai World Tribunal registrar, said: “There is a lot of rumour in the market in terms of misinformation and there is a lot of discourse. There are currently two cases. Should there be a deluge of claims, in the decree no.11 of this year the law now says the tribunal can establish panels, for example panels to handle small claims, panels to handle quantum assessments, panels to deal with liability issues. So we now have a scalable solution.”

Some 22,000 cases are rumoured to land with the special tribunal despite the tribunal only receiving two to date – one employment claim and another filed against Nakheel by Trinet Outdoor Advertising.

However, Mark Beer, DIFC Courts and Dubai World Tribunal registrar, said as a result of market rumour people are questioning the tribunal’s scalability because it has only three judges to oversee the claims – Michael Hwang, Sir Anthony Evans and Sir John Chadwick.

“There is a lot of rumour in the market in terms of misinformation and there is a lot of discourse. There are currently two cases. Should there be a deluge of claims, in the decree no.11 of this year the law now says the tribunal can establish panels, for example panels to handle small claims, panels to handle quantum assessments, panels to deal with liability issues. So we now have a scalable solution.” 

Beer also said that a number of lawyers have claims against Dubai World and its subsidiaries ready to submit but will not do so until negotiations with creditors breakdown. 

“A number of lawyers have told us that they have got online applications poised and ready but until the negotiations breakdown they are not going to submit. Isn’t that a good thing? Ultimately everybody must have recourse to a judicial process, which is fair, efficient, transparent and accessible. But if it can be resolved without the need for judicial intervention then, possibly, all the better.”

Earlier this month Nakheel said that it has started paying its creditors, which are owed AED500,000 or less. 
 A spokeswoman for Dubai World’s property division said partners owed bigger amounts were ongoing.

Creditors with outstanding sums worth more than AED500,00 have been offered a full repayment, comprising 40 per cent in cash and an Islamic bond issued by a Cayman Islands special purpose vehicle company.

Nakheel has started repaying creditors owed AED500,000 or less, the company confirmed on Monday.

A spokeswoman for Dubai World’s property division said creditors expecting half a million dirhams or less had already been paid or would be soon.

Talks with other partners owed bigger amounts were ongoing, the spokeswoman added.

Creditors with outstanding sums worth more than AED500,00 have been offered a full repayment, comprising 40 per cent in cash and an Islamic bond offering a 10 per cent annual return.

Some 50 per cent of creditors accepted the deal in May, according to Nakheel. They will start receiving payments once a further 15 per cent approve the terms.

In March, government-owned Dubai World announced a $9.5bn rescue package that involved its subsidiary Nakheel. Talks between the conglomerate and its lenders to restructure $26bn in debt are ongoing.

Dubai government’s property investor expects to secure full backing from creditors for its final settlement proposal.

Nakheel is confident of reaching a final settlement with creditors after receiving 50 per cent approval from suppliers and contractors that it owes money to.

The property division of investment vehicle Dubai World said it “remains optimistic of reaching a final settlement, as a precursor to making a 40 percent cash payment to its trade creditors”.

On Tuesday, the company behind the palm-shaped development off the Dubai coast met with senior members of the UAE Contractors Association to discuss settling agreed claims with creditors for its recapitlisation plan.

The proposal involves offering creditors 100 per cent of agreed claims through a 40 per cent cash payment and 60 per cent public trading securities.

“Within a month of presenting its trade creditors with a settlement agreement offering them 100 per cent recovery of agreed claims, Nakheel has now secured the agreement of many of its trade creditors, representing claims of approximately Dh6 billion,” Nakheel said.

The recapitalisaion plan falls under Dubai government’s $9.5bn rescue package for Dubai World, which is in talks with lenders over its $26bn debt restructuring.

Construction company Arabtec refuses to resume work on a residential property development until Nakheel pays its bills.

Bosses at Nakheel should check their mail or answer phone messages more regularly if they hope to avoid public spats with UAE construction companies.

The Dubai government-owned property developer stands accused of failing to pay Arabtec for work on one of the emirate’s largest housing projects.

Arabtec’s chairman Riad Kamal recently said that his company’s $816 million contract to build 1,500 of the 4,000 homes at the Al Furjan development in Dubai was suspended early this year over outstanding invoices. Clearly, attempts to secure payment by calling, emailing and sending letters to Nakheel have failed.

A frustrated Kamal said Arabtec had received no money since Dubai secured a $10 billion cash injection from Abu Dhabi last December.

Kamal isn’t the only one waiting for cash as Nakheel struggles to pay construction companies during the economic downturn. With no word from the developer, it’s unclear if or when these contractors will get paid. In the meantime, developments like Al Furjan remain unfinished and nowhere near completion. Imagine how the investors, who have snapped up 2,000 units between them, must feel. All they have to show for their money is a pile of bricks, or even worse a grossly expensive plot of sand. Neither represents good value for money.

Buyers caught in the middle of the Arabtec-Nakheel dispute must be praying for a quick resolution. Whether one materialises is anyone’s guess, but it seems fairly certain that Arabtec has no intention of getting back to work until all bills have been settled. For the investors’ sake, let’s hope that happens sooner rather than later.