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Parties accused of "intransigent" positions in Chelsea Barracks dispute

29 June 2010

Mr Justice Vos, the High Court judge in the £1bn Chelsea Barracks development dispute, has accused both sides of adopting "immediate and somewhat intransigent positions" in preparation for what they thought was inevitable litigation.

The judge said that Qatari Diar Real Estate Investment and CPC Group, owners of the site through a joint venture, should have “worked a little harder towards solving their mutual problems together”.

CPC later sold its stake in the joint venture to Qatari Diar (QD) for an immediate payment of £38m and a deferred consideration of £81m, depending on planning progress.

The case attracted national media interest because of the involvement of Prince Charles, who wrote to the chairman of QD, Sheikh Hamad Bin Jassim, complaining about the original design for the site by Lord Rogers.

“Both QD and CPC were faced with a very difficult position once the Prince of Wales intervened in the planning process in March 2009,” Vos J said.

“His intervention was, no doubt, unexpected and unwelcome. And the effects were, I suspect, exacerbated by the inevitable publicity which followed, and by the continuing economic malaise affecting the market for upscale developments like Chelsea Barracks.”

The mayor of London, Boris Johnson, also expressed his concerns about the plans for 638 homes, a hotel, restaurant and retail space.

“It is worth noting immediately, however, that the mayor’s concerns were not the same as the Prince of Wales’ concerns,” the judge said. “The mayor thought the scheme was repetitive and lacked variety, while the prince disliked its modernity and was looking for something more traditional.”

Mr Justice Vos concluded that QD was “acting as best it could in a very difficult political situation, with the objective of securing the best possible planning permission in the shortest feasible time. It was making the best of a bad job.”

However, he said that, by withdrawing the original scheme in June 2009, QD breached the terms of its sale and purchase agreement with CPC.

“QD was not withdrawing because it wanted to do so, or because it wanted to stop CPC getting its money,” Vos J said. “It was, as I have also said, between a rock and a hard place, and was doing the best it could in difficult circumstances.”

Mr Justice Vos ruled that QD had acted in breach of its contract with CPC, and was not entitled to repudiate their agreement. He said he would have ordered an enquiry as to damages, but that had not been sought by CPC.

It is understood that the implications of the judgment are still being discussed by the parties and no decisions have been taken.

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