Nov 02 - Government Entitled To Nearly £10 Million In Waterport Terraces Case

In February 2015 Gibraltar Residential Properties Limited (a company wholly-owned by HM Government of Gibraltar) was served with proceedings by the Administrators of Gibralcon 2004 SA (previously known as Brues y Fernandez Gibraltar SA) for approximately £27M.

The claims arose out of disputes related to the construction of Waterport Terraces and were issued by the Administrators of Gibralcon 2004 SA in the Mercantil Court of Madrid.

The claim served in February this year by Gibralcon followed a previous decision of the High Court of England and Wales in 2010 which held that the English Courts had exclusive jurisdiction in relation to all contractual disputes related to the Waterport Terraces project between the parties.

Despite that judgment, Gibralcon’s Administrators have sought to have the disputes tried before the Spanish Courts which are seized of the insolvency proceedings related to Gibralcon. Based on the English 2010 judgment GRP has challenged the jurisdiction of the Spanish Courts to deal with the disputes and the outcome of that challenge is still pending.

However in the meantime the English High Court which was seized of the contractual disputes as far back as 2010 has tried these disputes and has held that GRPL acted correctly in terminating the contract with Gibralcon.

Mr Justice Edwards-Stuart has declared that GRPL:

1. is entitled to liquidated damages in the sum of £2,510,623.71(being the maximum sum payable under the contract)

2. validly terminated Gibralcon’s employment under the Building Contract

3. is entitled to the sum of £9,582,877.00 inclusive of the liquidated damages

4. is entitled to interest at the rate of 1.5% on the amounts found due is entitled to the costs of the action to be assessed on a standard basis.

GRPL will now rely on the said Judgment of the High Court of England and Wales in continuing to challenge the jurisdiction of the Madrid Courts.

The Chief Minister, the Hon Fabian Picardo QC, said: "This is an excellent judgment for Gibraltar and I am very pleased indeed with the result. It has been proven that GRPL acted correctly in terminating the building contract with Gibralcon and as a result GRPL is entitled to over £9.5M. This result from the English Courts puts us in a much stronger footing to challenge the jurisdiction of the Spanish courts over the issue. I am very grateful for the work of the Government's legal team for their work on this, in particular Guy Stagnetto of TSN and the work of Albert Mena, the Financial Secretary, in the preparations for the case." 

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