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Sisk settles row with Shangri-La over Shard hotel building works


shard london

shard london


shard london

Construction giant Sisk and a hotels firm have settled a multi-million euro claim for damages over its work on a hotel in the tallest building in the UK.

Shangri-La Hotels had sought damages of £57.8m from Sisk over alleged delays by the Irish firm which resulted in the luxury Shangri-La Hotel in The Shard skyscraper in central London opening a year late.

Among the allegations that Shangri-La made were that problems with the fit-out of the hotel by Sisk meant that work fell 37 weeks behind schedule.

The hotelier added that Sisk was responsible for "substantial critical delays" and alleged that sections of Sisk's fit-out had to be replaced in their entirety.

Sisk lost the contract to fit out the hotel in August 2013.

Sisk however strongly refuted those claims, and launched an action of its own against Shangri-La, claiming damages of £26.8m.

The Irish company accused Shangri-La of breach of contract. However as part of a settlement announced yesterday, both those claims have now been dropped.

In a statement, the Irish company said, "John Sisk & Son Limited and Shangri-La Hotels PTE Limited wish to confirm that they have reached an amicable settlement to the claims and counter-claims recently issued in the Technology and Construction Court in London relating to the Shangri-La Hotel at The Shard.

"There are no admissions of fault or liability by either party in the settlement reached," the company added.

Terms of the settlement have not been revealed but informed sources suggest it took the form of a so-called "walk away" agreement.

Such a deal usually involves both sides dropping their claims and accepting whatever costs have already been incurred up to this point.

Neither side would make any kind of payment or payment in kind in such a settlement.

The Shangri-La Hotel is the centrepiece of The Shard since it opened 16 months ago.

The hotel occupies 34th to 52nd floors of the skyscraper, which has polarised opinion among architects and the ordinary public since it opened.

The hotel itself is part of the Hong Kong-based Shangri-La chain, which has a portfolio of hotels around the world.

Although Irish-based, Sisk diversified its business several years ago and so avoided the worst of the property crash here.

For the year to the end of December 2014, Sisk's parent company Sicon Ltd said pre-tax profits jumped from €1.5m to €9.1m. The profits came on the back of turnover that increased just over 17pc to €909m.

At the time of the publishing of the accounts, company chief financial officer Ger Penny said the firm was "very pleased" with the results.

"We... increased activity and operating profit levels during 2014 and each of our businesses have responded strongly to challenges posed during the year.

"We are optimistic about the prospects for the Group in 2015 and beyond.

"We are well positioned to make progress in each of the markets we operate in during the coming years. The overall blend of the business is good, with turnover evenly split between Ireland and the UK."

Former Smurfit Kappa boss Gary McGann took over as chairman earlier this year.

Irish Independent