Court dismisses investors’ claim of unfair treatment by Nama in sale

A group of “heavy-hitting international investors” has lost a High Court claim that it was unfairly treated by Nama in the sale of a valuable London development site to a rival bidder for a lower price.

Bruce Rippon, chief executive of Smart Design and Build International, (SDB) of Narborough St, London, had sued Nama after the firm’s unsuccessful bid for a 10-acre site in London.

He was a member of a partnership with Arif Dar, a representative of wealthy property owners including “certain unidentified royal families”; Dr Hitesh Bodani, whose personal fortune was estimated at $800m (€600m), and architect and designer Paul Sawford.

High Court president Mr Justice Nicholas Kearns yesterday said the court could not find in favour of the partnership, which he described as “disappointed bidders”.

He heard that Nama acquired a stg£30m loan from AIB in 2009 which gave it security over the site, owned and put up for sale by Bonnington Investments and Developments Ltd of Eastbourne. The security meant any sale would have had to be approved by Nama.

SDB had offered Bonnington £23.2m (€27m) before the deadline of Apr 4 last, with a final bid of £25m after the deadline had expired. On Jun 18, it learned its bid was unsuccessful and that a bid of £23.05m from the rival Precinct Properties had been accepted.

SDB claimed Nama, in sanctioning the sale, had acted contrary to its obligations to protect and enhance the value of assets and did not obtain the best achievable financial return for the State and had not acted fairly or rationally.

Mr Rippon claimed Nama had failed in its obligations to the Irish taxpayer and sought declarations that the partnership had not been fairly treated.

Ken Fogarty, counsel for the applicants, said SDB had estimated its loss and damage, suffered by lack of opportunity to develop the site, at £84m.

Mr Fogarty said any action seeking damages would have to be taken in the English courts but a declaration from the Irish courts that SDB had been unfairly treated would aid any proceedings taken in the UK.

Joe Jeffers, for Nama, said the action should be struck out on the grounds Nama was entitled to sanction the sale. He said that while the offer from Precinct involved less money, it was more attractive to the sellers because it was unconditional and consisted of cash up front.

Mr Justice Kearns said the sellers were entitled to accept a lower bid. He also found that SDB had no legal standing to bring the case.