Montpellier Estates today launched its high court deceit claim against Leeds city council over a proposed £70m arena project.
Montpellier claims that the council deceived it into entering the competition and putting forward its City One site for the arena development as a “stalking horse” for the council’s own plan to provide the long-desired facility for the city on its land at Elland Road.
An arena project to enable Leeds to compete with other cities, such as Manchester and Sheffield, has been in demand since the late 1990s, but the tendering process was not initiated by the council until July 2007.
However, in November 2008, following the economic downturn, the council terminated the competition, leading Montpellier to launch its deceit claim.
It alleges that, had it not been induced to take part in the process, it would have sold the City One site for substantially more than it is now worth.
In an additional claim, alleging breach of European Union procurement law, Montpellier also claims damages for the loss of profit it would have made on the development of the arena.
Montpellier alleges that the council deceived it into entering, and remaining in, the procurement competition by false representations to the effect that it had no preference for the arena to be built on its own land at Elland Road, that it did not wish to develop the arena itself, and that the process would be fair and transparent.
Montpellier claims that, in fact, the council did have a preference for Elland Road, wanted to build the arena itself, and used Montpellier’s bid as a “stalking horse” in a process that was flawed.
Written submissions on behalf of the council state that the proceedings are “vehemently resisted” and that allegations that senior employees and elected officials of the council acted fraudulently are “robustly defended”.
They maintain that the council’s only interest in developing the arena itself was as a “plan B” if the developer competition failed to produce value for money, and that it became increasingly clear, against the background of the credit crunch, that the two bids on the table might not achieve value for money.
The trial is scheduled to last for at least six weeks.
