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Local builder sues over police barracks project

The construction company awarded the tender for the old police barracks site is suing the developer of the project for breach of contract and is seeking half a million pounds.

The claimant, Decor Construction Limited, is a construction company based in Gibraltar. It was awarded the tender for the old police barracks site by the Gibraltar Government in May 2014.

The company then took its proposal to the Development and Planning Commission in November of that year where it obtained planning permission for 40 contemporary residential apartments.

Decor was contracted by The Arches Opco Limited, the defendant, to carry out works at the site.

The intention was that The Arches would become the developer – and so fund the construction phase of the project before selling the flats on for a profit – and Decor would become the contractor and gain an equity stake in a partnership which would ultimately own the police barracks site.

The lawsuit was revealed by GBC on Monday night.

The Arches Partnership LP, the defendant’s shareholder, consisting of 15 limited partners and one general partner, was formed in June 2015. Decor received an interest in this partnership on the understanding that they would transfer their interest in the police barracks site to The Arches.

Works at the police barrack site began in earnest in July 2015. However, in February 2016 The Arches alleged that Decor was not performing the terms of the building contract, resulting in the former terminating the contract on March 11, 2016.

Works at the site have subsequently ground to a halt.

Decor maintained that it did perform its obligations under that contract and that it was and still is owed approximately £500,000 for the work carried out at the police barrack site.

Lawyers acting on behalf of the company filed a suit before the Supreme Court on May 26 seeking specific performance of a settlement agreement, which they say both Decor and The Arches entered in to resolve the dispute arising out of the building contract and which the latter breached.

Alternatively, they seek damages for breach of contract.

For its part, The Arches claims that no monies were due to Decor under the building contract. They also argue that no binding agreement was entered into between the parties in relation to settling the dispute.

The defendant’s solicitor claims that the parties had been involved in settlement negotiations only and that no formal agreement had been reached on any point and there was therefore no binding settlement agreement between the parties.

In a statement The Arches said: “It is correct that there are on-going legal proceedings in the Supreme Court of Gibraltar in relation to this development. The Arches OPCO Limited is confident in its position in such proceedings. It is also the Arches OPCO Limited’s position that the development at Police Barracks shall continue as planned.”

Decor Construction is represented by Daniel Feetham and Darren Martinez.

Simon Triay represents The Arches.

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