Hopkins Architects is to keep its office in Dubai, despite being embroiled in a 30m dirhams (£5.4m) legal battle with state-owned developer Dubai Properties and having little work in the emirate

A source close to the company said Hopkins’ 20-strong office was “in a serious situation but will attempt to stop things from escalating”. They added: “It has no plans to shut up shop and still has some work.”

Hopkins has filed a claim for at least 27m dirhams in unpaid fees, as well as compensation for costs and lost profits with the Dubai International Financial Centre (DIFC) courts. Dubai Properties responded last week by countersuing Hopkins.

The dispute is over work that the architect carried out at Central Park 08, a pair of 50-storey towers near the DIFC, which went on hold this year but has since restarted.

Hopkins, which has been in Dubai since 2004, says it stopped work in January after its invoices remained unpaid. Dubai Properties denies this, and is seeking 4.9m dirhams to compensate it for the expenses it incurred as a result of the Hopkins’ decision, including the cost of hiring new consultants.

Chet Riley, an analyst at Nomura, said: “This case is a sign of things to come. There is evident disdain between developers and their service providers. For a long time the service providers held off taking action as it could mean the end of their work in the emirate but now some are at the end of the road.”

Meanwhile, some in the region have expressed concern over the state of the Gulf market.

One Dubai-based consultant said this week: “Very little is happening in Dubai but Abu Dhabi has also sort of shrivelled up, and Qatar has stopped as well. Everyone’s reconsidering projects, whether they have the money to fund them or not.”