Libya’s sovereign wealth fund the Libyan Investment Authority is fighting a court battle with a group of UK property developers who, it claims, misled them into making an investment in a high-profile hotel development on the outskirts of London.
The case, which is being heard in the Rolls Building complex of London’s High Court, has taken more than five years to reach trial and relates to a business deal signed in 2010.
The case centres on a plan to develop land in Maple Cross, by junction 17 of the M25 near Potters Bar. Property development company International Group Limited has been developing land in this area for around 25 years. IGL is the first corporate defendant in the case.
According to court papers, IGL, along with other investors, planned to turn the plot into a retail park and a flagship hotel for the Crowne Plaza chain.
In July 2010, the LIA invested in the project by buying a 50% stake in the project company for £10.5m.
The LIA is now suing its former business partners, claiming it was misled about the value of the development. They say IGL used letters from property consultant King Sturge to argue that the value of the project was worth more than £20m when an early indication report by Savills into the market value of the sites said they were worth much less.
The hotel development ultimately didn’t take place, and in March 2018 the hotel site was sold for £8.3m, without the benefit of an agreement with Crowne Plaza owner International Hotel Group.
The LIA is alleging fraud and dishonesty. The defendants robustly refute this. They argue, among other things, that the preliminary Savills report relates to the value of the land, not the value of the project or the corporate vehicle the LIA invested in.
They say in court papers the claim is “without merit and misconceived” and “should never have been made.”
The case started earlier this month and is scheduled to end in December.
(1) Libyan Investment Authority; (2) LIA Advisory Services (UK) Ltd (Formerly Known as Dalia Advisory Limited); (3) Maplecross Holdings Investment Co Ltd Claimants v (1) Mr Roger Milner King
(2) International Group Ltd; (3) Beeson Property Investments Ltd; (4) Beeson Investments; (5) Mr Charles Montgomery Merry; (6) Conrad Strategic Partners Ltd
