Investor Tempest pursues compensation as major scheme is sold on

An investor in the proposed Vauxhall Cross Island twin towers scheme in south London is claiming £12m in compensation after the plot was put up for sale.

Tempest Limited has issued proceedings against fellow investors Kylun and Wendover Investments for breach of agreement relating to the site, which currently has planning permission for two towers at 140m and 115m high.

In 2009 Tempest entered into a profit-sharing agreement with Kylun in relation to the purchase and development of the site.

In legal proceedings issued this month Tempest claims that, at present, it has not been bought out of this agreement.

Tempest’s claim for £12m in compensation would be triggered if and when Kylun achieves a sale of the site.

The Vauxhall Cross Island site was put up for sale for £65m earlier this year and has been marketed by property agents Knight Frank as having ‘potential for more massing and height’.

The developers appointed PLP architects to draw up plans for new towers on the site which would either stretch the current designs by 30 metres, or new designs which would match the neighbouring St George’s Wharf Tower at 200m tall.

The current development includes provision for 291 apartments including 58 affordable units as well as shops, restaurants a cinema and hotel. The development would also include 26,000sq ft of office space.

In a statement Tempest said: “In September 2009, Tempest entered into a profit sharing agreement with Kylun Ltd in relation to the purchase and development of the Vauxhall Cross Island site.

“Tempest has not been bought out of this agreement and maintains that the terms of the agreement will be satisfied upon sale of the site.

“Tempest, therefore, seeks declarations that it is entitled to equitable compensation and to be paid by the site’s owners for any payment received from the sale or development of the site, as well as damages from Kylun and others for breach of contract and breach of fiduciary duties.”

A legal representative for Kylun said: “The claim by Tempest is for a share of the proceeds of sale and is wholly without merit. Nicholas Dowding QC and Mark Sefton of Falcon chambers have been instructed to defend the claim.”