On 26 April 2013, Blair J held that Carey had been justified in withholding further funds under a loan agreement entered into with GHU for the funding of a major hotel and apartment complex on the Aldwych in London. GHU’s EUR 100 million plus claim for loss of profits and loss on the construction of the development failed and Carey’s counterclaim, for repayment of the sums advanced, succeeded.
Judgment followed a nine week trial in the Commercial Court, involving sixteen witnesses of fact and six areas of expert evidence. Although the development was in London, both parties were Spanish, and the background to the dispute was the bursting of the Spanish property bubble and the effects of the global credit crisis in late 2007 to mid-2008.
Among the defaults relied on by Carey was the occurrence of a “material adverse change” in the financial condition of the relevant Urvasco companies, and the entry into negotiations for the rescheduling of debt by reason of those companies’ actual or anticipated financial difficulties. The case also raised issues of accountancy, Spanish law (including interpretation of the loan agreement), quantity surveying, planning and programming (in a construction context) and the business and operation of hotels.
Carey was represented by Lord Grabiner QC and Douglas Paine of One Essex Court.