Radisson sues Manchester Airport over 25 years of utility bills

Hotel operator Radisson has lost the first stage of a legal battle it is fighting with Manchester Airport over 20 years of utility bills. The hotelier, which runs a large hotel at the airport, claims that it has been overcharged by the airport, citing its lease agreement. According to the lease, signed in 2000, Radisson is obliged to pay for electricity and gas “at no more than the prevailing commercial rates”. Radisson argues that this clause refers to the commercial rates of a public utilities network. Manchester Airport argues it means the commercial rate of a private supplier. This is relevant because, under Civil Aviation Authority rules, airports need a particularly robust source of electricity. Therefore, they are privately supplied and not connected to the main network. As a result, their utilities bills are higher. In a preliminary hearing last month, High Court judge HH Judge Halliwell was asked to rule on which of the competing interpretations was correct. And in a ruling handed down yesterday (9 December), he backed the airport. In his judgment he notes that, although the agreement refers to prevailing commercial rates, “it does not identify the market in which such rates are to be ascertained”. He said that “in such circumstances” the court should interpret the clause “to reflect the factual position of the parties”. At trial, the judge said, he was given evidence that other UK airports invoice their tenants for utilities based on their private rate. Therefore, those airports “collectively can be regarded as a market comparator”. He ruled that the clause means “the prevailing commercial rates of the private utility networks of the major UK airports defined so as to include the UK airports which receive international passenger flights in addition to internal passenger flights”. (1) Manchester Airport (2) Mag Investment Assets Ltd v (1) Radisson Hotel Manchester Ltd (2) Union Investment Real Estate GmbH Business and Property Courts in Manchester (HH Judge Halliwell), 9 December 2020 Photo © Radisson Hotel Group