Court ruling against the tendering process threatens future of £415m Zaryadye project

The future of a £415m Foster + Partners scheme in the centre of Moscow has been thrown into doubt following a court ruling that renders the developer’s contract null and void.

ST Development, a Russian developer, has had its contract with Moscow’s City Hall to build a 400,000 m2 complex torn up, after Moscow’s appeals court found that the conduct of the tender was illegal. The developer may now be forced to re-tender for the gigantic mixed-use scheme.

A spokeperson for ST Development told the Moscow Times: "We are losing time and money, and we are missing our deadline. We have already invested more than $200m [£100m] in this project, and now we cannot proceed because of the court's decision," he said.

Foster’s masterplan would see hotels and shops built alongside concert halls, a museum and a theatre, all in the shadow of the Kremlin.

The wrangling over the contract dates back to 2006, when ST Development beat three other bidders for the plan to build a scheme in the centre of Moscow.

However, ST Development’s $830m (£415m) bid for the scheme was far lower than rival bids by Austrian builder Strabag and Russian builder Monab, who offered $2bn (£1bn) and $1.45bn (£5,225m) respectively.

Monab challenged the decision in court, claiming that the developer’s parent company STT Group had “inside knowledge” of the tender process.

In January 2007, the court ruled the tender illegal, but STT Group appealed the decision. This week’s ruling refused to overturn that decision.

The STT now intends to appeal this latest ruling, but sources close to the scheme told the Moscow Times that City Hall could sign a direct agreement with STT Group to redevelop the property.