Shangri-La suing Shard hotel contractor for £57m

12 June 2015 by Janie Manzoori-Stamford

Shangri-La Hotels is suing the original contractor that worked on its London property at the Shard for £57m over the lengthy delays to the £39.2m development project.

A number of failures during the fit-out of the 202-room hotel, which occupies floors 35 to 52 of the London Bridge skyscraper, are understood to have contributed to its opening being delayed by almost 12 months.

In papers filed at the High Court, the Hong Kong-listed group claims that Sisk's mismanagement caused some of the work to fall up to 37 weeks behind schedule, reported Building magazine. Sisk's contract was terminated in August 2013 and it was replaced by Chorus Group.

In the legal documents, Shangri-La claims that Sisk caused "substantial critical delays" across all eight sections of the fit-out and failed to supervise its subcontractors' workforce "effectively or at all".

The contractor is also accused of not properly planning its works, failing to procure the necessary materials "in time or at all" and not providing Shangri-La with "proper notice of delays".

The value of Shangri-La's claim comprises £40.2m for the cost of rectifying Sisk's work, £13.6m of losses from the delayed opening of the hotel, £1.9m of liquidated damages and £1.6m of financing costs.

However Sisk has refuted the decision to terminate its contract as unlawful and said that it had been trying to reach a financial settlement with Shangri-La since it stopped work two years ago but had been "unable to reach a satisfactory outcome".

The company said it denied Shangri-La's claims in their entirety and has substantial claims against Shangri-La.

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Shangri-La hotel guests able to see into neighbouring rooms at night >>

Inside the Shangri-La at the Shard >>