NE Scotland, Orkney & Shetland

Shetland Islands Council loses latest stage of £14m case

Aircraft at Sumburgh Image copyright Colin Smith/Geograph
Image caption The airport operator made the claim after a dispute over a runway extension

Shetland Islands Council has lost the latest stage of a court action in a £14.2m dispute with Highlands and Islands Airports (HIAL).

The airport operator raised an action against the council over work at Sumburgh Airport.

It had contracted the council to provide engineering works and services for a runway extension project.

The Court of Session has ruled that HIAL had not left it too late to make a claim for payment.

The council said it now expects the case to go to a full hearing.

The court action raised in 2011 originally sought declarations that there had been a breach of contract.

It alleged defects had arisen and not been remedied.

There was no conclusion for damages. HIAL maintained the extent of the alleged loss could not properly be assessed.

But it added a further amendment later seeking payment of £14.2m plus interest from the council.

Council claim

Shetland Islands Council maintained the claim for payment came too late.

But judge Lady Scott said the terms of the action gave fair notice of the claim to the council.

Lord President Lord Gill, sitting with Lord Menzies and Lord Drummond Young, have now rejected the council's challenge to that ruling.

Lord Gill said: "It is not disputed that if the claim can be said to have been made only when the amendment was allowed, the claim has prescribed.

"The short question therefore is whether the declaratory conclusions in this action constituted the making of a relevant claim."

He added: "On a fair reading, the summons left the defender (the council) in no doubt that a claim was being made, that it was a claim for payment and that precise quantification of it would follow in due course.

"It was plainly a claim in part-implement of the defender's alleged obligations, being a definitive step in the process of enforcing them."

'Technical' matter

Shetland Islands Council said the case was now likely to proceed to a full hearing.

In a statement, it said: "The appeal court in Edinburgh has ruled against Shetland Islands Council in a technical legal matter over the Sumburgh airport runway extension dispute with Highlands and Islands Airports Limited.

"The issue before the Court of Session was whether or not the airport authority was time-barred from raising a claim for payment. HIAL initially raised the court action against the council claiming, among other things, defects in the design.

"The decision on this preliminary matter means that the case is likely to proceed to a full hearing. The council will not comment further at this time."

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