Saturday, Jun 26, 2010

(This item was originally published Friday.)

By Alex Delmar-Morgan

Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Both sides claimed victory Friday in a high profile legal wrangle over a scuppered plan to redevelop one of the most expensive residential sites in the U.K.

A High Court ruling from Mr Justice Vos Friday said that Qatari Diar, the real estate arm of Qatar's sovereign wealth fund, must pay damages to U.K. property tycoon Christian Candy's CPC Group after the Gulf Arab company withdrew its planning application for the scheme because Prince Charles had objected to the design.

Although Qatari Diar was found to be in breach of its contract when it backed out of the deal to build the GBP960 million ($1.43 billion) residential development, the judge ruled that the Middle East developer did not have to pay GBP68.5 million to CPC and that the Qataris had acted in good faith when they withdrew the planning application.

"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," the judge said in a summary of the judgment.

He said that any damages owed to CPC Group were dependent on a further inquiry into the matter.

After the judgment Christian Candy said he was "very happy," according to the BBC.

However, in an emailed statement, a spokesman for Qatari Diar said: "CPC has failed in its attempt to achieve an early payment of money from QD and is in exactly the same position under the contract as it was before."

"They wanted earlier payment of a sum potentially due to them under a contract and they have failed. Any further consideration due will be paid as and when planning consent for the Chelsea Barracks redevelopment is obtained - as was agreed when the contract was originally entered into," the spokesman added.

The ruling is the latest twist in a protracted dispute between Christian Candy and Qatari Diar, the real estate arm of Qatar Investment Authority, the Gulf Arab state's sovereign wealth fund.

Candy started legal action in November last year against Qatari Diar after it withdrew a planning application to develop the 12.8 acre Chelsea Barracks site on the banks of the river Thames in London. A hearing last month revealed that Prince Charles, a champion of traditional architecture, had written to the Qatari Diar chairman and the Prime Minister of the gas-rich Persian Gulf state Sheik Hamad bin Jasim Al Thani, expressing dismay at the modernist design.

Candy claims the Qataris breached their contract and must make a payment to CPC to cover loss of the earnings had the proposed scheme been approved.

-By Alex Delmar-Morgan, Dow Jones Newswires; +207 842 9496; alex.delmar-morgan@dowjones.com

(END) Dow Jones Newswires

26-06-10 0716GMT