Dubai Shariah court to decide fate of $460m super-yacht Luna

Farkhad Akhmedov’s yacht in the Mugla Province of Turkey on Aug. 16, 2017. (Ali Balli/Anadolu Agency/Getty Images)
Updated 25 July 2018
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Dubai Shariah court to decide fate of $460m super-yacht Luna

  • Dubai’s judicial authorities have ruled that a controversial case involving the $460 million super-yacht Luna must be decided in a UAE Shariah court
  • The super-yacht was impounded by DIFC courts while docked in the UAE for maintenance

DUBAI: Dubai’s judicial authorities have ruled that a controversial case involving the $460 million super-yacht Luna must be decided in a UAE Shariah court and not in the Dubai International Financial Center’s common-law courts system.
Ownership of the yacht — once the property of billionaire Russian oligarch Roman Abramovich — is a key part in bitter divorce proceedings between wealthy Azerbaijan-born businessman Farkhad Akhmedov and his former wife Tatiana Akhmedova.
The super-yacht was impounded by DIFC courts while docked in the UAE for maintenance after a London court handed it to Akhmedova as part of a £453 million ($600 million) divorce settlement in 2016.
But in a ruling earlier this month, seen by Arab News, the Dubai Judicial Tribunal has sent the matter to the Dubai courts for a decision. The tribunal was set up to decide on matters of disputed jurisdiction between the “offshore” DIFC court and the “onshore” courts.
The decision will add further controversy to a case that has already made headlines around the world. The Shariah legal system is generally held to treat the husband more favorably in divorce cases than Western courts.
In addition, the ruling could be interpreted as a further blow to the credibility of the DIFC’s independent legal system, based on common law and conducted in English, which is an important part of Dubai’s positioning as a global financial center.

 

 Akhmedov’s lawyers argued that his ex-wife had sought to use the DIFC courts as a “conduit jurisdiction to enforce the English family court judgment to avoid the stringent tests for recognition and enforcement (under UAE law), which violates public policy and public order in the UAE and Islamic shariah,” according to the ruling.
They added that “the jurisdiction of the DIFC courts is restricted to civil and commercial matters. They are not competent in family and marital matters.”
The Judicial Tribunal, under chairman Ali Ibrahim Al-Imam, accepted that argument and said that the Dubai courts were the “competent courts to entertain the dispute, including the attachment of the yacht.”
The court could lift the current impounding order. Akhmedov has claimed the Luna is not owned by him, but by a Liechtenstein corporation, Straight Establishment, for the benefit of his children.
The 115-meter Luna, launched in 2009, has two helipads, a 20-meter swimming pool, a mini-submarine and 10 luxury guest cabins.
It has been in Dubai dry docks since October last year. There have been concerns about its condition deteriorating in an Arabian Gulf summer, and permission has been sought from the court to move it from its current position to nearby Port Rashid.
One lawyer involved in the case, who asked not to be identified, said: “Our guidance is that it could take between six and 12 months to get a decision from Dubai courts, and that will not be good for the condition of the vessel.
“A lot depends on whether the court will seek a full review of the terms of the original settlement made by the English court. The man tends to do better in Shariah courts,” he said.

FASTFACTS

Super Yacht

The $460 million, 115-meter Luna has two helipads, a 20-meter swimming pool, a mini-submarine and 10 luxury guest cabins.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.