A Spanish hotel company that began a prestige hotel development in London's Aldwych has lost a near £72m High Court claim after the project stalled and the property fell into the hands of a rival.
Mr Justice Blair dismissed Grupo Hotelero Urvasco's (GHU) claim against a Spanish fund - that had invested in the project after it ceased advancing money.
The court had been told that this led to the failure of the hotel and apartments redevelopment on the site of the former Marconi Building at the corner of Aldwych and the Strand.
In addition to dismissing the claim the judge also ordered GHU to repay Euros 65m in loans and interest due to the fund, known as Carey Value Added.
After receivers were called in, rival Spanish hotel group Sol Melia bought the site in June 2010 and finally opened the hotel, named ME, in January this year.
The judge said that GHU's general manager, Pablo Couto Sagredo, first saw the site in 2004, that the company bought it for £48.5m and engaged Norman Foster's firm of architects to design what would have been their first hotel outside of Spain.
The plan was for a 173 room luxury hotel and 92 residential apartments.
He said that the fund came on the scene in 2007 and provided lending until June 2008.
GHU alleged that Carey stopped lending in breach of contract, starving the development of funding at a time of tight credit and leading to its failure.
Work on the development stopped in September 2008, and the site was ultimately bought by Sol Melia in June 2010.
The judge said: "By a twist of timing, in January 2013 in the course of the trial Mr Couto's hotel finally opened. Having invested so much of his time, energy and money in the project, it must have been a bitter moment for him. Melia opened it under its contemporary brand name, ME."
However, he rejected GHU's £71.38m claim for damages for loss of profits from the development.
He ruled that the fund was not in breach of contract by withholding funding in June 2008, because GHU was itself in default under the terms of the loan agreement.
He said: "My overall finding is that GHU was in default under the Loan Agreement as at 6 June 2008, and that Carey was not obliged to make the advance otherwise due on that date, and that its subsequent cancellation of the agreement was lawful. I find therefore that Carey is entitled to succeed on its counterclaim for the sums it has advanced to GHU, and on its claim against GU as guarantor."
He said that GHU would not have been able to fund the project to completion even with further funding under the agreement.