Developer in Arena court victory over Leeds Council

Montpellier Estates Ltd is suing the council for alleged breaches of public contract tendering rules and is also "on the cusp" of launching a claim for "deceit", a judge said today.

And, despite the city council's bid to "strike out" parts of Montpellier's case, Mr Justice Eady opened the way for the company to take all its claims to a full High Court trial.

Harrogate-based Montpellier had hoped the arena would be built on its "City One" site on the city's Sweet Street and went through a long and costly tendering process.

But the company was incensed when Leeds "terminated" the competition in November 2008 and, on the very same day, announced that it had decided to carry out the prestigious development itself on land owned by Leeds Metropolitan University in Claypit Lane.

Through its leading light Jan Fletcher, Montpellier says it was "given a false picture" by the council and effectively duped into taking part in the bidding process.

But Rhodri Williams QC, for the council, said the criteria that tenderers had to meet were set out clearly from the outset and Leeds was fully entitled to cancel the process when neither of the two private bidders put forward "affordable" proposals.

Montpellier, he added, "could not have been awarded the development contract" as its bid failed to meet the competition's affordability parameters.

Today the council said it would continue work on the arena and said it was "disappointed" at the court's decision.