The iconic heritage property Capitol Singapore has "fallen into economic slumber" and its potential has been compromised, a High Court judge has said.
The impasse over the Stamford Road property has come as relations between the shareholders - real estate veteran Pua Seck Guan and a member of the prominent Kwee family - have soured badly.
The two were part of a consortium - also including Osim's Mr Ron Sim - which put in the winning bid in 2010. The aim was to restore the buildings - Capitol Theatre, Capitol Building and Stamford House - to their former glory and to add new vibrancy to the City Hall area with a luxury hotel, retail shops, residences and a theatre.
The landmark buildings are owned by units of Mr Pua's Perennial Real Estate and Pontiac Land affiliate Chesham Properties.
By last year, the project had stalled amid a bitter feud, with Perennial Real Estate launching winding-up applications on three associated firms that held the properties.
The release of the judgment last month disclosed details of the acrimony between Mr Pua and Pontiac Land's Mr Kwee Liong Seen.
It also shows how the deterioration of their relationship severely stunted the progress of their joint venture, to the point where the project's management committee had difficulty deciding the colour scheme for the facade.
Additional amount that needs to be pumped in to get the six-star Patina hotel running, as ST understands.
The two men had not been on speaking terms for more than a year at the time of the winding-up applications and, as a result, the management committee lost direction.
The Patina, a six-star hotel whose 157 rooms are spread across the Capitol Building and Stamford House, got its temporary occupation permit in October 2015 but remains unopened and continues to undergo rectification works. The mall opened in March 2015, and Capitol Theatre opened in May 2015.
The judgment revealed that Chesham, which is held by the Kwee family, blamed Mr Pua for the hotel's inability to open, as he allegedly refused to countersign payments for various expenses incurred by Patina.
The Straits Times understands that at least another $11.5 million needs to be pumped in to get the hotel up and running.
The court decision also disclosed for the first time the key issues that caused the deadlock between the project's shareholders and management, and which led to Perennial Real Estate seeking court action to wind up the three firms.
In his High Court judgment, Justice Kannan Ramesh said the dispute centres on the timing of the execution of a joint venture agreement (JVA) between Perennial Real Estate and Chesham, and two retail property management agreements.
According to Chesham, the parties had agreed in 2014 that the JVA and the retail property management agreements were to be signed at the same time. But Perennial denied this.
In April 2015, Mr Pua asked that the retail property management agreements, which were to have secured Perennial's role as retail manager, be signed. But Mr Kwee refused to do so until the joint venture agreement was finalised.
The hotel management agreement, which locked in Chesham's role as hotel operator, had been signed earlier in 2013.
"This disagreement became a source of great bitterness between Perennial and Chesham, and Mr Pua and Mr Kwee," the judge noted. "Perennial accused Chesham of using the retail property management agreements to hold them to ransom over the signing of the JVA, while Chesham accused Perennial of reneging on the (2014) agreement to sign the two documents concurrently."
After that, the parties were deadlocked.
Adding to the list of grievances, the judgment revealed that Perennial remained unpaid for retail leasing services it provided to the mall since its opening in 2015.
In March this year, Perennial lost the case. The High Court ruled that it would not be just and equitable to wind up the companies because there is an exit mechanism available to Perennial. Under the Constitutions of the companies, any of the parties can offer to sell its shares to the other at a fair value.
Perennial is appealing against the High Court's decision. The appeal could be heard in the third quarter of this year.