Both sides seek silver lining in ongoing battle for control of London hotels
The legal battle between Paddy McKillen and the Barclay brothers could run for years
Sir David Barclay (left) and his twin brother Sir Frederick. Photograph: PA
Dozens of lawyers filled the benches of the High Court last year when property developer Paddy McKillen went head-to-head with the billionaire Barclay brothers over control of three luxury London hotels.
Yesterday, by contrast, Court 69 in London’s Royal Courts of Justice was near-empty, bar a filled press bench, when Lord Justice Rimer handed down the judgment of the Court of Appeal – one that came down strongly on the side of the Barclays.
By 2pm, however, the two sides were back in the same complex of buildings off the Strand – this time arguing over whether an entirely separate legal action initiated by the Barclays against McKillen should be heard in Dublin, or in London. That action will be heard in October, though any result will be challenged.
Meanwhile, McKillen must decide whether he will seek Supreme Court permission to appeal yesterday’s judgment, since the Court of Appeal refused him leave to do so.
So far, £20-£25 million in legal bills has been accumulated. McKillen has already paid £6 million of the Barclays’ bill; he will know how much more he will have to pay once the taxing master in London has inspected the bills lodged.
The Court of Appeal’s action costs for both sides – the latest phase in the war of attrition for control of Claridge’s, the Berkeley and the Connaught hotels – will be approximately £1 million, with McKillen having to pay four-fifths of it, the judges ruled yesterday.
However, he remains undeterred, insisting he will one day take control of the hotels’ holding company, Coroin: “I will continue to fight the Barclay brothers by any legal means to protect our staff, guests, and our rights.”
His words came in a statement that began with the headline: “Court of Appeal confirms that McKillen can call for Derek Quinlan’s shareholding to be offered to the other shareholders, giving McKillen control of Coroin.”
However, the judgment from Lady Justice Arden, Lord Justice Moore-Bick and Lord Justice Rimer rejected every point that could have overturned last year’s High Court ruling argued on his behalf by former Labour attorney general Lord Peter Goldsmith.
His interests had not been unfairly prejudiced, they said. Control over Quinlan’s shares had passed to the Barclays in 2011 but ownership had not – so pre-emption rights included in the shareholders’ agreement when the hotels were bought did not come into play.
Lord Goldsmith had argued that Justice David Richards had been wrong last year on this point, saying that McKillen “has seen Quinlan’s ownership over his shareholding disappear like the Cheshire Cat until only the smile is left”.