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Apr 16 - Initial Victory for Government in OHL Runway Tunnel Case

picardoGood news was revealed today by the Chief Minister as the first stage of legal proceedings put against the Gibraltar Government by former Runway tunnel contractors Obrascon Huarte Lain SA (OHL), come to a close. Mr. Picardo this morning

told the Press that the  Judgement being delivered today by Mr Justice Akenhead is that the ‘Gibraltar Government has succeeded entirely on the central issue of how the contract between OHL and the Government was terminated in the summer of 2011’.

The case dates back to May 2012, when the contractor commenced legal proceeding against the Government for breaching their contract, claiming that they were entitled to the contract value of their works, which added up to £20.1 million. OHL also made a claim for an indemnity after the former GSD administration allegedly did not obtain the correct planning permission necessary for the works. This was the largest claim ever made against the Gibraltar Government.

The Chief Minister explained that the Government was found to have terminated the contract correctly on 20th August 2011. He added, ‘ additionally the effect of that finding is that we are entitled to recover from OHL in accordance with clauses 15.3 and 15.4 of the Contract - essentially all costs associated with the termination and the completion costs of the project which are over and above OHL’s original Contract price.  That price at tender was just over £30m.’

Mr Picardo went on to say that, ‘the quantification of such losses will be a matter for further determination at what is known as a "quantum" hearing in due course; but we may find that this judgment eventually leads to largest award of damages to the Government of Gibraltar in history.’

The Government will now seek to recover its very substantial costs in these proceedings to date. Whilst they do understand that OHL have the right to seek to appeal the Court’s judgement, Mr. Picardo noted that there has been no indication hat they will do so.

Commenting on the Government’s case, Mr. Picardo thanked their legal team made up of Guy Stagnetto and Nick Culatto of Triay, Stagnetto and Neish, as well as the Government’s solicitor in the UK, Edward Corbett, and QCs Nicholas Denny and Fiona Parker.

Mr. Picardo also highlighted the role of key witness, former Chief Technical Officer who received praise from Mr Justice Akenhead for his precise and measured evidence.

The Chief Minister went on to say that works to complete a tunnel under the runway will go ahead once more, and a tender pre-qualification process to determine what complains might be able to undertake the works from the state they are presently in, has been started. Mr. Picardo insisted that works to the area will restart as soon as possible. He remarked that there is now, at last, a crack of light at the end of the tunnel.