Supreme Court hears Rogano dispute despite last-minute settlement

Lawyers acting for Forthwell Limited, which has operated as Rogano since 1935, and landlord Pontegadea UK apologised to the court after informing judges that a financial agreement had been reached late on Tuesday evening.

The restaurant has remained closed since the pandemic after repeated flooding and an electrical fire left the building unsafe.

The dispute centred on whether Pontegadea should compensate Forthwell for profits allegedly lost while repair works remained incomplete.

Opening proceedings at Glasgow City Chambers on Wednesday, David Thomson KC said the parties had only finalised agreement the previous evening and the court had been informed at 11.30pm.

Dean of Faculty Roddy Dunlop KC told the five justices: “I am rightly mortified to be standing here in this situation.”

Mr Thomson described the circumstances as a “matter of considerable professional embarrassment”.

“I cannot present that to the court as an acceptable narrative, because it is not,” he said.

“I fully accept that settlement of the proceedings on the literal eve of the appeal before this court is, to put it mildly, highly unsatisfactory.”

President of the Supreme Court, Lord Reed, replied: “Yes, that is putting it mildly.”

Despite the settlement, the court – led by Lord Briggs – decided to hear the case because of its wider importance for Scots contract law.

Lord Reed said: “It is a matter of public importance that the time of the court is used in the public interest, and it is in the public interest that we should resolve the legal question raised by the case, which will be important in other cases.”

Court documents state that in 2013 Forthwell transferred its lease interest in the Rogano to subsidiary Lynnet Leisure Rogano Limited, which continued operating under a licence to occupy.

Forthwell is linked to Glasgow pub businessman James Mortimer, while Pontegadea UK is owned by Zara founder Amancio Ortega.

The dispute arose after flooding in December 2020 and January 2021 caused an electrical fire that rendered the building unsafe. The parties were unable to agree on the extent of repairs required.

Forthwell argued that Pontegadea’s alleged failure to carry out repairs under the lease caused Lynnet Leisure to lose profits and sought damages for both past and anticipated future losses.

Pontegadea maintained that Forthwell could not recover losses suffered by Lynnet Leisure because it was a separate legal entity.

The Outer House of the Court of Session ruled in Forthwell’s favour in June 2024, but that decision was partly overturned by the Inner House in October, prompting the appeal.

In submissions, Mr Dunlop argued that a ruling for Rogano could create a “schism between the law of Scotland and England, when cross-border trade is the norm”.

He contended that allowing claims by entities not party to a contract would create uncertainty across Scottish contract law.