Spanish hotel company hit with costs bill in Marconi building battle

A Spanish hotel company that lost a near £72m claim against an investor in its failed redevelopment of the old Marconi building in central London was today ordered to foot most of the bill for the trial. Blair J ordered Grupo Hotelero Urvasco (GHU) to pay 75% of the legal costs incurred by Carey Value Added, a Spanish fund which invests in hotels. He ordered GHU to make an interim payment of £4m, with the full bill to be assessed later. Carey claims that its total costs were more than £12m, while GHU’s own costs were more than £10m. Rejecting GHU’s claim that it should only have to pay a much lower percentage of Carey’s costs, the judge said: “In my view, a reduction of up to 80% as advocated by GHU would bear no relation to the overall outcome of the case. Carey was the overall winner. It succeeded both on its claim and on GHU’s claim.” GHU sued Carey for failing to advance funding under a loan agreement relating to the development of a hotel and apartments on the prime site on the corner of Aldwych and the Strand. GHU claimed that this led to the project failing, and the site ultimately falling into the hands of Spanish rival, Sol Melia, which opened the hotel ‘ME’ there earlier this year. However, in April, Blair J dismissed the claim and upheld a counterclaim by Carey for repayment of money advanced under the agreement. Including interest, Carey claimed that €65,410,700 was due as at 18 January 2013. However, the judge said Carey was required to give credit for a sum of around €21m it had received in proceedings against a third party in Spain, subject to any further appeals in those proceedings. GHU claimed damages for loss of profits from the development, and the judge said that its damages claim was valued in closing at about £71.38m. Grupo Hotelero Urvasco S.A. v Carey Value Added S.L. and anr Commercial (Blair J) 24 June 2013Duncan McCall  QC and Mr Tom Smith (instructed by Hogan Lovells LLP) for the Claimant in Folio 931 and the Defendant in Folio 1692. (GHU)Lord Grabiner QC, Mr Manus McMullan QC, Mr Andrew De Mestre and Mr Douglas Paine (instructed by Mayer Brown LLP) for the Defendants in Folio 931 and the Claimant in Folio 1692. (Carey)