Counsel for CPC says Qatari Diar had "no lawful justification" for withdrawing planning application

Christian Candy began his evidence in the High Court today over the Chelsea Barracks row between his company CPC Group and Qatari Diar.

On the first morning of the court case, the counsel for CPC described Qatari Diar’s decision to withdraw the planning application on 12 June 2009 as having “no lawful justification”.

Lord Grabiner, QC, said under the sale and purchase agreement between the two companies, Qatari Diar was “prohibited” from withdrawing the application except in certain “defined circumstances”.

CPC central claim is that it was interference of the Prince of Wales that persuaded the Qataris to cancel the £3bn project designed by Lord Rogers.

Lord Grabiner, QC, referred to a letter written on 1 March 2009 by the Prince to Sheikh Hamad bin Jassim, the chairman of Qatari Diar, in which he said his “heart sank” when he saw the plans and urged him to abandon them.

CPC also pointed to evidence of a meeting on 11 May between the Emir of Qatar and Prince Charles at Clarence House, in which it claims an understanding was reached. According to notes taken by Sir Michael Peat, the Prince’s private secretary: “the Emir was surprised by the Rogers designs for Chelsea Barracks and said that he would have them changed”

CPC argued in court that Qatari Diar had the option at that stage to withdraw the planning application unilaterally but it would have been contractual obliged to pay CPC a deferred payment of upto £81m.

Instead, their barrister argued, Qatari Diar tried to “broker a deal” with Prince Charles whereby they gave him assurances that once planning was granted the Roger’s scheme would not be “built out” and that the Prince’s requirements would be accommodated.

CPC says it opposed this “soft undertaking” strategy because it would probably leak out and would damage the planning application.

CPC is seeking a declaration from the judge, Mr Justice Vos, that withdrawing the planning application was a breach of contract. If the decision goes in CPC’s favour it will launch a damages claim.

Candy, who was called as the first witness in the case and who is the 100% shareholder in CPC, faced questions from Qatari Diar’s counsel in the afternoon.

Joe Smouha, QC, questioned Candy over the role of his brother, Nick Cancy, in decisions on the Chelsea Barracks scheme.

In response Candy said: “Nick is a principle contact with Sheik Hamad”.

Outlining the case for Qatari Diar, Smouha, argued that the company had been entitled to withdraw the planning application after being led to believe that Boris Johnson, the London mayor, was likely to refuse it.

He referred to notes from a meeting between Qatari Diar and the GLA on 7 May in which “major concerns” were made about the “repetition” of the Roger’s design and it was stated that Johnson wanted more “variety within the proposals”.

Qatari Diar also challenged evidence that anything was agreed between Prince Charles and the Emir at the 11 May meeting.

Counsel argued that Sir Peat’s note was made three months after the alleged event and that it was “inexplicable” that he was not giving evidence in court to explain the time lapse.

Candy will continue his evidence tomorrow in the case, in which seven other witnesses will be called, is expected to finish by the end of next week.