July 7 (Bloomberg) -- Bin Muhanna Holding Group and AAJ Holdings Co. said they lost a ruling over ownership of Oman’s Blue City, a stalled $20 billion real estate project.
Oman’s Supreme Court ruled last week that Cyclone LLC owns 70 percent of Blue City, Najeeb Al-Noaimi, chairman of Bin Muhanna, said in a telephone interview yesterday. Qatar-based Bin Muhanna and Bahrain’s AAJ are now reviewing their legal options, Al-Noaimi said. Othman Janahi, an AAJ board member, confirmed the decision.
The ruling is part of a three-year legal battle for control of a project that’s central to Oman’s economic transformation. Sayyid Haitham bin Tariq al Said, the minister of culture and heritage and a member of the royal family, owns 50 percent of Cyclone.
“We plan to file lawsuits at the London Court of International Arbitration and the ICC International Court of Arbitration in New York,” Al-Noaimi said.
Blue City, an hour’s drive from the Omani capital, Muscat, was supposed to include more than 200 villas, 5,000 apartments, four hotels, two golf courses and a clubhouse. A total of $925 million was raised from bondholders to finance construction, which started in 2006 and has missed sales targets as real estate speculators left Middle Eastern markets.
Cyclone sued AAJ in September 2007, claiming the company’s purchase of a 70 percent stake in Blue City was invalid and the stake should be handed over to the Omani company. AAJ won at the first hearing only to lose to Cyclone after an appeal. That was upheld by last week’s ruling.
In April, AAJ formed a partnership with Bin Muhanna. Al-Noaimi is Qatar’s former justice minister and was once a defense attorney for Saddam Hussein. Cyclone’s chairman, Anees al-Zadjali, declined to comment on the verdict when contacted by phone yesterday. Calls to AAJ’s chief executive officer, Ahmad Janahi, weren’t answered.
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