17th October 2018
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Council due back in court as airport operator appeals Sumburgh compensation ruling

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Shetland Islands Council is being dragged back to the Court of Session after Highlands and Islands Airports decided to appeal the recent judgment relating to compensation for Sumburgh Airport’s faulty runway extension.

The move means the claim against the local authority for £2.5 million could drag on until the end of this year, possibly longer, before it is settled.

HIAL managing director Inglis Lyon confirmed today that an appeal had been lodged against last month’s judgment by Lord Menzies. He ruled that an independent adjudication process last year which found the council liable for the defective runway was invalid due to a procedural error by the adjudicator. The gaffe had only been spotted by chance by council lawyers.

The ruling meant the council, which designed and managed the runway project, escaped having to pay HIAL £2.5 million. But if HIAL’s appeal is upheld it could land the council with another huge compensation payout to add to the £4.8 million it must stump up to Lerwick Port Authority for the Bressay Bridge fiasco.

HIAL also has the option of seeking a fresh adjudication.

The east-west runway was extended into the sea in 2006 by contractor Balfour Beattie but the east end has since broken up and subsided regularly during gales with the wave action sucking out the infill, leaving gaps several feet deep below the tarmac.

HIAL has spent around £400,000 on running repairs and expects to proceed with major rebuilding this year despite the legal action dragging on. The rebuild has just gone out to tender.

Mr Lyon said a lot more had been learnt recently about the defects and how much the runway has moved after a specialist was employed to take electronic measurements. Video recordings were made in different weather conditions.

The council has insisted it was not in breach of contract and that HIAL had agreed to compromise on build quality due to budget limitations, accepting that maintenance costs would be higher.

Relationships between the two public organisations remain frosty. Mr Lyon said the former business partners were still not talking and there was no immediate prospect of an amicable settlement.

No date has been set for the appeal to be heard in Edinburgh but Mr Lyon said indications were it would be between two and eight months after the appeal papers are completed.

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