Long-running legal dispute comes to a close as construction group agrees to pay out.
Construction group Birse has settled its legal dispute with Citibank company CIB Properties by agreeing to pay £1.2m, plus costs. The dispute dates from 2001, when CIB terminated a contract with Birse for the construction of a data centre at Riverdale in Lewisham, east London.
Birse estimates that CIB’s legal costs will total some £2m. The settlement does not include the £2.3m already paid to CIB, nor the £2.9m legal costs that Birse amounted in the year ending April 2005.
As part of this full and final settlement, Birse will make 14 quarterly payments to CIB, starting on 1 February 2006. It has an option to meet up to £720,000 of the liability by issuing ordinary shares.
Commenting on the agreement, Peter Watson, Executive Chairman said: “My Board colleagues and I are delighted to have reached this settlement with CIB. Through this settlement agreement, we have removed the significant risk to Birse from the uncertainty of a major litigation process and have also now brought to an end the payment of considerable ongoing legal fees that were being incurred. With this major issue fully resolved the Directors are now able to concentrate on accelerating the forward momentum of the Group.”