Tarmac offshoot is sued: Norwich Union claims contractor misrepresented track record

NORWICH UNION has issued a writ against a project management subsidiary of Tarmac, claiming undisclosed damages with regard to the company's work on a Bristol shopping centre which opened a year behind schedule.

Neither company would comment on a press report that the claim amounted to pounds 100m, although Tarmac said it was satisfied that it had no material liability.

Norwich Union is understood to have accused Schal International, the Tarmac subsidiary, of misrepresenting its track record in building large shopping centres. The writ also blames Schal for poor choice of contractors and overspending.

A Tarmac spokesman said the company was first appointed in 1988 by Ladbroke to build the Galleries shopping centre in Bristol. But Schal was sacked in April 1991 after ownership of the development passed to Norwich Union.

When Tarmac was dismissed from the job the centre was already six months behind schedule. It finally opened in October 1991, a year late.

The construction period was dogged by a fire and explosion in 1990 which caused pounds 750,000 worth of damage and set the project back by three months. Then Budgens pulled out of the development, depriving it of a big name supermarket anchor that would have attracted smaller shops to take space.

The Norwich Union writ follows an action launched by Tarmac claiming unpaid fees and costs in respect of services provided on the project. Norwich Union said at the time that it had counter-claims.

Norwich Union said yesterday: 'Despite attempts to reach agreement there remain differences. Norwich Union remains hopeful that agreement may yet be reached as to the amount of Schal and Tarmac's liability.'

The threat of expensive litigation comes at a bad time for Tarmac, where recuperation from heavy losses in 1992 has reached a crucial point. In recent months the company has announced a return to profits in the six months to last June, a pounds 215m rights issue and the completion of a pounds 300m disposal programme.