Qatari Emir Should Testify in Chelsea Barracks Property Trial, Judge Says

Qatari Diar Real Estate Investment Co., a unit of the emirate’s sovereign wealth fund, is unlikely to win a suit over plans for an apartment complex at London’s Chelsea Barracks unless the emir of Qatar testifies at a trial.

Judge Peter Smith warned Qatari Diar’s lawyer “of things that might blow up spectacularly in your client’s face at trial” at a hearing in a London court today.

Qatari Diar was sued in November by CPC Group Ltd., the luxury-home developer controlled by Christian Candy, for breach of contract after it pulled out of a plan to develop the site in one of London’s most expensive neighborhoods.

A joint venture of CPC and Qatari Diar paid 959 million pounds ($1.46 billion) for Chelsea Barracks in January 2008. In November of that year, Qatari Diar bought out CPC’s 30 percent stake for an undisclosed sum, retaining Candy for project management, design and marketing.

When Prince Charles later criticized the development as unsuitable for the area, Qatari Diar withdrew its planning application. Sheikh Hamad Bin Khalifa Al-Thani, the emirate’s ruler, spoke to Prince Charles in February 2009 about his objections to the project, according to CPC’s lawsuit.

The application appears to have been withdrawn at the urging of the emir, Smith said, and unless he testifies to the contrary, the court will assume that is the case.

“The emir is a head of state with huge concerns on his plate” and isn’t an employee of Qatari Diar, the company’s lawyer Andrew Twigger said of the emir testifying. “A certain degree of reasonableness is required.”

Smith said the emir could testify by videoconference. Prince Charles won’t testify at the trial, Twigger said.

Qatari Diar has until tomorrow morning at 10 a.m. to file a defense statement in the lawsuit or it won’t be able to defend itself at trial, Smith ruled. The company also has until that time to file any counterclaims. The judge also told Twigger to produce e-mail evidence by May 13. A May 18 trial is scheduled.

The case is CPC Group Ltd. v. Qatari Diar Real Estate Investment Company, case no. 4260/09, High Court of Justice, Chancery Division (London).

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net.

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