Sir Frederick Barclay's nephews sold the Ritz London for "half the market price" after secretly recording conversations between the billionaire co-owner and a Saudi investor offering £1.3b for the Mayfair hotel, the High Court has heard.
The 85-year-old businessman and his daughter Amanda are suing three of his twin brother Sir David's sons – Alistair, Aidan and Howard – and Aidan's son Andrew over 94 hours of recordings made over several months.
The High Court has previously heard that the "elaborate system of covert recording" only came to light in January when Alistair was filmed on CCTV "handling the bug placed in the conservatory at the Ritz".
At a further preliminary hearing, conducted remotely earlier today, Mr Justice Warby heard that the recording of Sir Frederick and Amanda Barclay's conversations was "commercial espionage on a vast scale".
Hefin Rees QC, representing Sir Frederick and Ms Barclay, said in written submissions that the recordings "captured over 1,000 separate conversations over a period of months", including conversations with the claimants' lawyers as well as "bankers and business people".
He added that "a separate wifi bug was also used", which was supplied by private investigations firm Quest, which "invoiced for 405 hours of their time to listen and transcribe the recordings", with transcripts later "shared amongst the defendants and others".
The court was told that Sir Frederick, who had "placed great trust" in Aidan and Howard Barclay to run his and his brother's business empire, is "now left to contemplate his nephews' betrayal".
Sir Frederick and Ms Barclay are bringing a legal action alleging misuse of private information, breach of confidence and breach of data protection laws, against their four relatives and Philip Peters, who "holds a board position" in the Barclay group of businesses.
Mr Rees submitted that material previously disclosed to his clients "reveals beyond doubt that the defendants derived significant financial and commercial advantage from the unlawful use of the recordings".
He added that they were made at a time "when there were significant ongoing commercial disputes between the parties concerning, among other things, the sale of the Ritz hotel, the financial performance and management of the group, (Amanda Barclay's) continuing financial interests in the group, and Sir Frederick's divorce proceedings".
In March, Sir Frederick said he had received competing bids to buy the five-red-AA-star, 136-bedroom hotel for more than £1b, adding that any move to sell the establishment for "below the proper value would give rise to further litigation".
The Ritz has since been sold to an unnamed Qatari investor for an unknown price, reported to be around £750m.
Mr Rees told the court the defendants heard "Sir Frederick's conversations with Sidra Capital, which at the time had made an initial offer of some £1.3 billion for the acquisition of the Ritz hotel".
He added: "Despite this, the defendants sold the Ritz hotel to another buyer from Qatar at a price that appears to be for half the market price. One is left to speculate why."
Mr Rees argued that the recordings allowed the defendants "to anticipate the claimants' every move in advance, plan their business strategy around that, including knowing what legal advice the claimants were seeking and getting at this crucial time when their business and personal relationships had broken down, and the respective interests of the claimants and the defendants were in conflict".
Heather Rogers QC, representing all five defendants, said that, although Sir Frederick and Amanda Barclay's pleaded case claimed that they had "suffered loss and damage" as a result of the covert recordings, "the claimants have given no details of, or information about, what that loss or damage is said to be".
She accepted that "the claimants have been recorded without their consent or knowledge", adding: "It is correct that the defendants shared some of the transcripts between themselves."
But Ms Rogers continued: "This is not a case in which private information has been obtained and then widely disseminated to the press – it is not that kind of case at all."
She added: "There is heavy spin on a number of matters about the case."
Mr Justice Warby will continue to hear submissions on Thursday afternoon.