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Hotel company plans to sue council for £23m

06 February 2017 by
Hotel company plans to sue council for £23m

A hotel company plans to sue Western Isles Council for damages of £23m, claiming the local authority for the Outer Hebrides "unlawfully" awarded the lease of Lews Castle on the Isle of Lewis to hospitality operator Natural Retreats.

Proceedings in the Court of Sessions in Edinburgh heard that the council planned to contract out the hospitality and accommodation fit-out of the upper floors of the castle to a private sector partner and awarded the contract to Natural Retreats.

However, Kenman Holdings, the parent company of Cala Hotels, claimed Natural Retreats had had an "unfair advantage" and accused the council (Comhairle nan Eilean Siar) of having a "pre-tender engagement" that did not take place in a "transparent, objective and non-discriminatory way" as required by EU law.

Kenman Holdings, which runs hotels in Stornoway, was initially barred from taking legal action after judges rules the company had waited too long. However the ban has now been lifted after an appeal at the Court of Session on 3 February.

The upper floor of the council-owned castle has been turned into 23 luxury, self-catered apartments by Natural Retreats, and First Minister Nicola Sturgeon is set to officially open the £19m redevelopment on 6 March, according to the Aberdeen Press and Journal.

The Cala Hotels group owns and operates three hotels in Stornoway: the Cabarfeidh hotel, the Royal hotel and the Caladh Inn.

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