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To bring you up to date with the story of Blue City, there was a flurry of publicity in June, after Cayman Island registered Essdar Investments Ltd announced that it had bought 99% of the Class A Floating Rate Senior Secured Unrestricted Notes ("Notes") issued by BCC1, at a face value of US$655.

Essar Investments Ltd is in turn owned by Essdar Capital in partnership with Essdar Capital Managers Ltd. The group is based in Dubai where it is regulated by the Dubai Financial Services Authority, but ultimate ownership rests in the hands of members of the ruling Abu Dhabi family.

So what will happen to the dream of Al Madina Al Zarqa? Early intimations suggest that revised ownership might focus on developing tourism, since many of the 'planned hotels, commercial and associated facilities' are on track, and 'better fit demand.' Mr Sanghvi, senior managing director of structuring and investment at Essdar at the time of the deal, is reported to have remarked that the occupancy rates of hotels in Muscat were very high and tourism prospects healthy.

However, a major part of the security on the bond lies in the 25 sq kilometres of land that was gifted by royal order to the original Blue City project back in 2005-6.

Thus Essdar has also had to await the judgement of Oman's Supreme Court on the ownership dispute between AAJ Holdings of Bahrain and Cyclone LLC, the Omani partner, 50% owned by Sayyid Haitham bin Tariq al Said, the minister of culture and heritage and a member of Oman's royal family. See the many earlier postings on this blog.

Earlier this month, Bin Muhanna Holding Group of Qatar and AAJ Holdings Co. of Bahrain said that they had lost the ruling over ownership of the Blue City.

How does Bin Muhanna Holding Group come into the picture? The chairman of the company is Dr Najeeb bin Mohammed Al Noaimi, formerly minister of justice in Qatar, and a defence lawyer for Saddam Hussein. His company's partnership with AAJ Holdings, owned by Ahmed Abu Baker Janahi, was announced in April this year. Indeed, it's been suggested that the interest of Qatari investors added incentive to Essdar's completion of the bond purchase.

Mr Al-Noaimi for his part did not rule out "lawsuits at the London Court of International Arbitration and the ICC International Court of Arbitration in New York," to contest the Omani court's decision, echoing some of Mr Janahi's earlier pronouncements.

What will happen to Cyclone's interest?

It's one thing to own the project, quite another to develop it to make it work. Apparently there had been more interest from US and European investors than from other Gulf partners while BCC1 was running the show. Yet 'as of November last year, only $75m worth of sales had been made, compared with a forecast of $860m.' Legal niceties remain to be resolved and new investment partners found. That's not so easy in a depressed market.

Essdar itself has not committed to injecting further cash into the development.

AAJ Holdings brought the Qatari company in because it needed further financing, not only for Blue City but also for its stalled $750 million Marina West development in Bahrain. Work stopped abruptly on Marina West in March, leaving dozens of residents who had bought off-plan, wondering when they might be able to move into their homes.

Mr Janahi used a press release to announce that his company was determined to bring the project to completion, was working with the developers, Bahrain's major construction company Al Hamad, and had introduced new partners (Bin Muhanna) whose input would give fresh impetus.

Everybody seems reluctant to comment.