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AL-MAZAYA HOLDING COMPANY - K.S.C. (PUBLIC) AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(All amounts are in Kuwaiti Dinar)

26. Contingent Liabilities
(a) As at June 30, 2023, the Group is contingently liable in respect of letters of guarantee amounting to KD 277,312
(December 31, 2022 – KD Nil, June 30, 2022 – KD Nil)

(b) During the year ended December 31, 2020, two subsidiaries of the group had filed lawsuits before the courts of
the Emirate of Dubai in the United Arab Emirates against some investors regarding the development of real estate
projects in the Emirate of Dubai in the United Arab Emirates. During the year ended December 31, 2021, the
Court of Cassation upheld the judgment issued by the Court of Appeal, which had previously upheld the judgment
of the Court of First Instance issued in favor of the two subsidiaries of the group about their entitlement to a total
amount of AED 19,780,852, in addition to the legal interest of 9% from the date of the judicial claim till full
settlement, whereby the entitlement of those subsidiaries including the legal interest until December 31, 2021 had
amounted to AED 25,368,142 (equivalent to KD 2,119,645) according to the latest calculations for that entitlement
by the court, and hence, the management of those subsidiaries had decided to reverse the provisions recorded
in their books against their full entitled amount according to the Court’s verdict including the legal interest up till
December 31, 2021 which is reported as provisions no longer required in the consolidated statement of profit or
loss for the year ended December 31, 2021. The subsidiaries of the group initiated legal execution procedures
against those investors for the fulfillment of that verdict along with its legal interest, which resulted in the collection
of almost 83% from the total amount due to the two subsidiaries till June 30, 2023, whereas the remaining amount
is currently under collection by the Group’s two subsidiaries. As a result of those lawsuits, the defendants filed a
counter-lawsuit against the Parent Company, the two subsidiaries and others demanding for the payment of AED
261,026,454 (equivalent to KD 21,810,170) in addition to the legal interest of 5% from the date of the judicial claim
till full settlement, in addition to demanding payment of AED 50,000,000 (equivalent to KD 4,177,770) as
compensation for lost profits. Subsequently, the court demanded from the plaintiffs in those new legal cases to
reregister them at the concerned judicial department and pay the required additional fees, based on which, the
plaintiffs had reregistered those cases at the concerned judicial department during the fiscal period ended June
30, 2023. In the opinion of the Company’s independent legal counsel, there is no need to book any provisions by
the Company against those legal cases for now due to its solid legal standing in those cases, and hence, no
provisions were booked by the Group against those legal cases as of the accompanying consolidated financial
statements date.

During the period ended June 30, 2023, a final court verdict by Court of Cassation of United Arab Emirates was
issued to affirm the previously issued verdict against a subsidiary of the Group in United Arab Emirates with an
amount of AED 5,000,000 (equivalent to KD 417,020). The Group is currently in process of completing the
settlement procedures to the opponent against the related provisions that were previously booked in prior years
for that legal case.

During the period ended June 30, 2023, some buyers of real estate units in one of the Group’s projects in the
Emirate of Dubai filed a lawsuit demanding to terminate the booking forms of the subject real estate units and to
refund an amount of AED 5,530,321 including related compensation (equivalent to KD 462,088) in addition to
legal interest of 9% till full settlement date. The Group had recognized provision of KD 462,088 on conservatism
basis against that legal case during the fiscal period ended June 30, 2023 (Note 21). This case is currently under
hearing in front of the legal courts as of the accompanying consolidated financial statements date.

A subsidiary to the Parent Company in the Emirate of Dubai had filed a lawsuit (as a precautionary measure in
order to avoid the statute of limitation related to the date of filing that lawsuit) against several parties demanding
them to be bear the costs of rectifying the defects and repairing some buildings in the Emirate of Dubai that they
had previously developed for the benefit of the subsidiary during the period from 2007 to 2015, due to their
responsibility for the implementation work and supervising the implementation of those buildings for the benefit of
the subsidiary as some defects that require repairs had appeared according to the reports of relevant authorities
in the Emirate of Dubai, where the Company demands to oblige the defendants with a total amount of AED
105,222,600 (equivalent to KD 8,791,916) in addition to the legal interest of 5% from the date of the judicial claim
till full settlement date, which represents the estimated budget of the repair costs for the subject buildings that
resulted from implementation defects by the main contractor and subcontractors in addition to reserving the right
to request compensation after assessing the damages and losses as well as obliging the defendants to pay the
related fees, expenses, and attorney’s fees. This case is currently under hearing in front of the legal courts as of
the accompanying consolidated financial statements date.

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