Highlands and Islands Airports Limited has been given the go-ahead to take a multi-million pound claim against Shetland Islands Council to court.
The appeal court in Edinburgh has ruled against the SIC in a legal wrangle over the long-running dispute surrounding Sumburgh Airport’s runway extension.
The decision raises the unwelcome prospect of the council having to make a pay-out of more than £14 million should the airport authority ultimately prove successful in its legal challenge.
HIAL raised its action following a dispute over the runway extension, which became plagued by structural problems caused by the sea.
The airport firm contracted the council in 2005 to provide engineering works and services for the job.
But it later raised an action at the Court of Session in Edinburgh, which a judge last year allowed to go to a hearing of evidence.
Shetland Islands Council appealed against Lady Scott’s ruling, stating that too much time had passed between the alleged failings and the claim being made.
But today Scotland’s senior judge, the Lord President, Lord Gill, sitting with Lord Menzies and Lord Drummond Young, rejected the challenge.
The court action raised in 2011 originally sought declarations that there had been a breach of contract and alleged that defects had arisen and not been remedied.
There was no conclusion for damages as the airport firm maintained that the extent of the alleged loss could not properly be assessed.
It later added a further amendment seeking payment of £14.2 million, plus interest, from the council.
The local authority maintained that the claim for payment came too late. But Lady Scott said the terms of the action gave fair notice of the claim to the council and she could see no basis for any prejudice or disadvantage to it.
Lord Gill said: “It is not disputed that if the claim can be said to have been made only when the amendment was allowed, the claim has prescribed.
“The short question therefore is whether the declaratory conclusions in this action constituted the making of a relevant claim,” he said.
The senior judge said: “On a fair reading, the summons left the defender [the council] in no doubt that a claim was being made, that it was a claim for payment and that precise quantification of it would follow in due course.”
The council said the case was now likely to go to a full hearing.
A non-attributed SIC statement read: “The appeal court in Edinburgh has ruled against Shetland Islands Council in a technical legal matter over the Sumburgh airport runway extension dispute with Highlands and Islands Airports Limited.
“The issue before the Court of Session was whether or not the airport authority was time-barred from raising a claim for payment.
“HIAL initially raised the court action against the council claiming, among other things, defects in the design. The decision on this preliminary matter means that the case is likely to proceed to a full hearing. The council will not comment further at this time.”
HIAL managing director, Inglis Lyon said: “HIAL welcomes the decision and will now consider how best to proceed.”