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Dunnes says it doesn't owe €20m pay to building firm

DUNNES Stores is disputing a decision requiring it to pay about €20m to a construction company over a shopping centre development in Kilkenny. Its dispute against Holtglen has now been fast-tracked to the Commercial Court and will be heard next year.

Holtglen claims it has very large borrowings in connection with the shopping centre and commercial development at Ferrybank, Co Kilkenny, and says it is "of the utmost importance" that it is paid by Dunnes as soon as possible.

Company director Dermot McPhillips also said in an affidavit that Dunnes was seeking to thwart the opening of the shopping centre by refusing to fit out its anchor store.

Last October, following a lengthy hearing of disputes between the companies, an arbitrator's award was made for €20m. The dispute arose from an agreement in June 2007 for the building of an anchor store and other stores in a shopping centre and commercial development at Ferrybank.

The arbitrator upheld some of Dunnes' complaints of breaches of the development agreement. However, it found Holtglen had remedied the breaches and Dunnes was therefore not entitled to terminate the development agreement.

Dunnes later argued it was not obliged to pay those sums because, it alleged, Holtglen was insolvent. The arbitrator ruled the alleged insolvency did not amount to failure to comply with the agreement, could not be a defence to a counterclaim, and directed Dunnes to pay.

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