The owners of stalled City skyscraper the Pinnacle are facing an order to pay more than £12m to contractor Brookfield Construction.
Pinnacle No 1 was this week told it could not have any more time to mount a defence to the claim for construction fees.
The tower, which, if built, is set to be the tallest in the Square Mile, has been on hold since the beginning of the year as the owners continue to seek to refinance its debt and raise enough money to fund the £800m construction.
The scheme is 90% owned by the Saudi Economic and Development Company, which comprises over 60 investors, and is managed by Arab Investors.
In court this week, lawyers for the owners said that they were in “complex tripartite negotiations” in an attempt to resolve both the £12m due to Brookfield Construction and “wider issues”.
A £140m loan from HSH Nordbank, used to acquire the site in 2007, will mature next month. It has already been granted two, one-year extensions.
The development arm of Brookfield has been widely rumoured to be in discussions over a potential cash injection into the Pinnacle.
The Pinnacle’s lawyers said it would be “draconian” for the court to shut them out from defending the claim against the tower’s main contractor.
However, Judge Edwards-Stuart said: “In light of the evidence, it is difficult to see how the court can reach any conclusion other than that the defendant has not served a defence because it cannot find one.”
As a result, he said that Brookfield Construction had been “kept out of a sum well in excess of £12m, properly due to it some months ago”.
He added: “It seems to me that the real reason [for the delay to filing a defence] is to find other contributors to fund the claimant’s claim, rather than having to pay out and recoup money from others who it considers may have a liability.”
The proposed 64-storey Pinnacle, which is stuck at seven storeys, has been dogged with funding issues. HSBC was tasked more than two years ago with arranging a £600m financing deal to help fund construction of the 1m sq ft development.
Architect Kohn Pedersen Fox has recently been tasked with working on design alterations to bring down building costs.
All parties declined to comment.
