Leeds council sued for £30m over Arena contract ‘sham’

Jan Fletcher, of Montpellier Estates Ltd (MEL), contends Leeds City Council duped her into competing for the £70m Leeds Arena contract when it had already decided to carry out the scheme itself. The council denies the accusations and is defending its reputation at a High Court hearing, which could last up to seven weeks.

The dispute centres on a 2007 procurement tendering process, when MEL put forward its 10-acre City One site, in Holbeck, as a potential location for the state-of-the-art music arena.

It had only one corporate rival when it entered the competition in August 2007 and had already submitted its bid when, in November 2008, the council terminated the process, instead deciding to build the arena on a site off Claypit Lane, which it owned jointly with Leeds Metropolitan University.

MEL is claiming around £30m damages, accusing the council of deceit, fraudulent misrepresentation and breaching its duties under public contract regulations.

Charles Hollander QC, for the company, said Ms Fletcher was repeatedly reassured MEL would not be used as a stalking horse, that the council did not want to build the arena itself, and the competition would be fair and transparent. He told the court MEL would have sold its site had “it not been for the representations” from the council, which he claimed had been concealing its “Plan B” option.

The council says it only decided to develop the arena itself when the property collapse in 2008 led to fears the bids which had come forward might be unviable.

The case continues.