Kuwait sheikh sues UBS for $21.4 mn in Dubai court
A Kuwaiti sheikh is suing UBS AG for $21.4 million, alleging the Swiss bank failed to pay him for helping it become lead arranger on a $9 billion asset sale by the Kuwaiti telecommunications operator Zain, a Dubai court heard on Sunday.
The case highlights the complexity of doing business in the Gulf, where personal connections to high-ranking officials or executives are often valued in deal-making.
Sheikh Meshal Jarah al-Sabah, a member of Kuwait's ruling family, says UBS recruited him with a verbal contract in July 2009 to help scupper the French media conglomerate Vivendi's bid to acquire Zain's operations in about 15 African countries. UBS denies the allegation.
Vivendi called off the talks later that month. India's Bharti Airtel subsequently bought Zain's African assets for $9 billion in 2010; UBS advised Zain on the deal.
Sheikh Meshal says he met with two UBS executives at Dubai's opulent Atlantis hotel and agreed to urge Zain's shareholders and management to open a tender to other bidders for the operator's African units, according to documents submitted to the court.
He says he also committed to help UBS become the lead bank for the sale, in return for a fee of 0.1-0.2 percent of the total deal value, payable on completion of the transaction.
UBS accepts that the Atlantis meeting did happen, but says it was merely a "meet and greet" as a courtesy to the sheikh, documents submitted to the court show.
The bank, represented in court by Britain's former lord chancellor, Charles Falconer, says it did not require Sheikh Meshal's assistance because it had been advising Zain on the sale of its African assets before the meeting, and had worked with the Kuwaiti operator on previous deals.
UBS also says it did not ask Sheikh Meshal to provide any services, so he is not entitled to any fee from the bank.
The trial is due to last for five days, with a verdict expected late this summer.
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