British Waterways claims contract breach in face of £41m Marconi compromise

A unique dispute in which a petition for reduction of Marconi’s share capital in a company was challenged has resulted in a settlement between clients of Norton Rose, Allen & Overy (A&O) and Ashurst Morris Crisp.
The compromise means Marconi, represented by A&O, is due a repayment of £41m from a joint venture company, Ultramast, set up to construct telecom masts on sites owned by Railtrack and British Waterways.
Ultramast petitioned the High Court to sanction the reduction of the share capital in the company. Marconi was seeking a return of £55m from a total investment of £65m.
British Waterways, which contested Ultramast’s petition, alleged that Ultramast, represented by Ashursts, has ongoing fiduciary duties. Most petitions of this nature are not opposed.
Antony Dutton, the Norton Rose partner for British Waterways, said: “The contract was entered into on the basis that Marconi would have sufficient capital to build the masts. If this capital is left outstanding then Ultramast will have insufficient funds to have the sites developed.”
Marconi is still providing some investment to Ultramast. There are rumours of a management buy-out of remaining Ultramast shares, worth £65m, owned by defunct rail operator Railtrack.