Libyans chase Quinlan consortium

Libya’s new government is ­chasing a consortium led by Irish investor Derek Quinlan for £4m. The National Transitional Council (NTC), represented in the UK by Mahmud Nacua, has taken over a case begun under Colonel Gaddafi’s ousted regime to try to secure an outstanding overage payment relating to the 2004 sale of the former Jamahiriya School in Glebe Place, SW3. The case is being defended. The prime development site was sold by the Libyans to Mainstride and DMQ Chelsea, a vehicle run by Quinlan, for £21m in 2004. The Quinlan consortium planned to build a luxury residential scheme on the one-acre site and agreed to pay the Libyans a further £4m for the site once consent for its redevelopment had been granted. Consent to transform the school into a £250m, 100,000 sq ft luxury residential scheme designed by Foster & Partners was given in 2008. The approved scheme for seven flats and a villa included the conversion of the adjacent self-contained Inner Court site to a small private school. Affordable housing was to be off-site. However, debt secured against the site was subsequently transferred to the National Asset Management Agency and the former school was recently sold to Orion Capital Managers for around £80m. Orion is not involved in the ­proceedings. The Libyans began their attempt to secure the £4m overage in July 2010. However, the claim has emerged fonly ollowing a High Court hearing earlier this week in which a lawyer acting for Mainstride and DMQ Chelsea was seeking further time to produce a list of more than 6,000 documents disclosable in the dispute. Trevor Box of Freeman Box Solicitors told the court that the case was being defended on the grounds that the planning permission secured was not such as to trigger the overage clause, that permission had come too late and that a release clause in the sale contract had been triggered. The case is scheduled for trial in April 2012. Joanna Lampert, partner in Berwin Leighton Paisner’s real estate litigation and dispute resolution team, said: “Now that the UK has formally recognised the National Transitional Council as the ruling government in Libya we can expect to see further litigation as attempts are made to release cash from Libyan assets in the UK.” The NTC’s plans to push ahead with the claim came as resolutions are being prepared to enable UN officials to release hundreds of millions of pounds of frozen UK assets to help fund the stabilisation of the country. Gaddafi’s former regime is conservatively estimated to own around £300m of commercial property in London. Hogan Lovells was appointed by the NTC in the summer to help it block attempts by the Gaddafi regime to access UK embassies and frozen assets.