Dubai World, the sovereign wealth-backed investor and joint venture partner in MGM Mirage's CityCenter development project, has sued the casino operator for breach of contract following the debt-strapped company's disclosure that it was at risk of defaulting on its loans.

The disclosure by the US company controlled by Kirk Kerkorian in early March, which also included a warning of a "substantial doubt about [MGM Mirage's] ability to continue as a going concern" puts the $8.8bn luxury resort project in jeopardy, Dubai World said.