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Fri 25 Jun 2010 05:47 PM

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Court rules against Qatari Diar in UK property case

UPDATE 1: CPC Group wins right to pursue damages from Qatari firm.

Court rules against Qatari Diar in UK property case
LONDON PLANS: On June 12 2009, Qatari Diar Real Estate Investment withdrew its planning application to develop the GBP959m ($1.44bn) Chelsea Barracks. (Getty Images)

A British property company will seek damages after a court ruled on Friday that its Qatari partner in a luxury London housing scheme breached a contract by bowing to pressure from Prince Charles to abandon their plans.

Charles, the heir-to-the-throne and a longstanding critic of modern architecture, wrote privately to Qatar's prime minister last year to protest about the "brutalist" contemporary design.

London's High Court said Qatari Diar, a property firm linked to the Gulf state's royal family, broke a clause in an agreement with CPC Group when it then shelved its proposals.

Charles' intervention angered many architects, who branded him a "meddling prince," and raised questions about his constitutional position. British royals have only symbolic power and usually steer clear of contentious issues.

In a 98-page ruling, judge Geoffrey Vos said the leaking of the comments had left both sides "in a very difficult position."

"His intervention was, no doubt, unexpected and unwelcome. And the effects were, I suspect, exacerbated by the inevitable publicity which followed," the judge wrote.

The Qatari firm's decision to withdraw its application may have broken their agreement, but it was "acting as best it could" in a difficult situation, the judge added.

"It could not do nothing," he said. "It was, in modern parlance, caught between a rock and a hard place."

The two companies paid 1 billion pounds ($1.50 billion) for the site and hoped to build more than 600 flats and a hotel. It attracted fierce opposition from many locals who said the design was too big, too modern and unsuited to the area.

The 12.8 acre (5.2 hectare) site near the River Thames is surrounded by 19th century houses, as well as Christopher Wren's landmark 17th century Royal Hospital for retired soldiers.

The judge ruled in favor of Qatari Diar on several other issues and said it did not have to pay CPC the 68.5 million pounds outlined in their contract in case the plan was refused.

However, he said CPC would be entitled to unspecified damages. CPC lawyer Neil Kitchener said it will seek costs for breach of contract at a further hearing, possibly next month.

"The judge has found that QD's withdrawal of the planning application...was unlawful," he said. "That was the reason CPC brought these proceedings. It has been successful. Its decision to make the claim has been vindicated."

A Qatari Diar spokesman said CPC's legal action was "ultimately about money."

"They wanted early payment of a sum potentially due to them under a contract and they have failed," the spokesman said. (Reuters)

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Jon 10 years ago

I guess QD is going to find out that contracts really do mean something anywhere other than the Middle east...