Essendi UK Hotels 2 Limited v London Property Company Limited [2026] EWHC 1354 (TCC)

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Essendi UK Hotels 2 Limited v London Property Company Limited

[2026] EWHC 1354 (TCC) | High Court of Justice, Technology and Construction Court (KBD)

Before HHJ Stephen Davies, sitting as a High Court Judge | Heard 4 to 12 March 2026 | Handed down 5 June 2026

Interactive Process Flow | Landlord liability for combustible hotel cladding

Case Analysis Process Flow

0 of 7 nodes explored

1. Case Overview

Case: Essendi UK Hotels 2 Limited v London Property Company Limited [2026] EWHC 1354 (TCC)
Court: High Court of Justice, Technology and Construction Court (KBD)
Judge: HHJ Stephen Davies, sitting as a High Court Judge
Hearing Date: 4 to 12 March 2026
Judgment Date: 5 June 2026
Case No: HT-2025-000061

The tenant and operator of the Ibis London Wembley hotel sought to require its landlord to remove highly combustible category 3 ACM panels. It relied on lease covenants, the Regulatory Reform (Fire Safety) Order 2005 and non-derogation from grant, and claimed loss from closing the hotel. The liability trial also addressed specific performance (paragraphs 1-12).

Central Legal Test: The court construed the landlord's good-condition and legal-obligations covenants, determined responsibility under the Fire Safety Order, tested causation and reasonableness of the closure decision, and applied the equitable requirements for a sufficiently precise order of specific performance (paragraphs 12 and 465-483).

Intolerable Fire Risk

Both fire experts agreed that the aluminium composite panels had a highly combustible polyethylene core, presented an intolerable fire risk and had to be removed (paragraphs 1-2).

Lease Structure

Essendi had installed the panels before the original lease. LPC relied on historic remedial and indemnity provisions, but their cut-off date fell shortly before the Grenfell Tower fire (paragraphs 3-6).

Closure Loss

Essendi closed the hotel on 29 July 2025. This trial decided liability for resulting loss, leaving quantification and loss-specific causation for a further trial (paragraphs 7-8).

2. Procedural History

Accelerated Trial

An accelerated timetable was ordered because responsibility had to be resolved so that urgent remedial works could be planned (paragraph 10).

Liability Only

The court decided liability, closure causation and entitlement to specific performance, not the amount of damages (paragraphs 8 and 12).

3. Defendant's Position

LPC denied that the lease covenants imposed liability and relied on Essendi's original installation of the cladding and the earlier lease provisions. It also opposed causation, derogation and specific performance (paragraphs 4-6).

Historic Responsibility

LPC argued that Essendi had selected and installed the panels and had assumed bespoke remedial and indemnity duties under the original lease.

Remedy Opposed

LPC disputed a mandatory order and relied on cost, duration and the proposition that replacement would provide something different from the demised building (paragraphs 366-368 and 477-480).

4. Claimant's Position

Essendi said LPC's current lease covenants and Fire Safety Order responsibilities required removal and replacement, that LPC's breaches caused the reasonable closure, and that damages alone were inadequate (paragraphs 3, 7 and 12).

Good Condition Covenant

Essendi said the landlord had to put and keep the structure and exterior in good condition, including remedying the dangerous external wall.

Fire Safety Duties

It said LPC controlled the structure and exterior and was the responsible person required to eliminate or reduce the dangerous-substance risk so far as reasonably practicable (paragraphs 395-425).

Specific Performance

Essendi sought an outcome-based order requiring removal of category 3 ACM panels and replacement with a suitable non-combustible façade.

5. Court's Analysis

Good Condition Breach

LPC breached the good-condition covenant by failing to remove and replace the panels. Its defence and counterclaim based on the original lease failed (paragraph 12(i)).

Independent Fire Safety Breach

LPC controlled the external structure and was independently in breach of the legal-obligations covenant through its Fire Safety Order duties (paragraph 12(ii) and 395-425).

No Derogation

The implied covenant not to derogate from grant was not breached (paragraph 12(iii)).

Closure Reasonable and Caused

LPC's breaches caused the decision to close the hotel, and closure was reasonable in the circumstances known on 29 July 2025 (paragraph 12(iv)).

Mandatory Relief Justified

The required result was clear and practicable. LPC had produced no persuasive evidence of impossibility or oppressive hardship, and damages were not an adequate substitute for removal of an intolerable fire risk (paragraphs 475-480).

6. Decision and Outcome

Winner: The Claimant and Tenant (Essendi UK Hotels 2 Limited) succeeded.

Result: LPC was liable under the good-condition and legal-obligations covenants. It had to remove the ACM panels within six months and replace them within an overall 18 months. Essendi could proceed to assessment of closure damages. The derogation claim failed (paragraph 12). The Defendant and Landlord (London Property Company Limited) did not succeed on this application.

Practical Effect: The landlord had to carry out and fund the façade remediation, subject to the final order. The tenant's closure-loss claim moved to a later quantum stage.

Removal

Category 3 ACM panels were to be removed within six months (paragraph 12(v)).

Replacement

Suitable replacement external cladding was to be completed within an overall 18 months (paragraph 12(v)).

Damages Stage

Essendi was entitled to a further assessment of damages unless the parties resolved quantum (paragraph 12(vi)).

7. Key Legal Principles and Practice Points

Lease Construction

Responsibility for an inherently dangerous façade depends on the language and allocation of the current lease, read with the earlier lease where it supplies a pleaded defence.

Fire Safety Control

A landlord controlling the structure and exterior can be the responsible person for those premises under the Fire Safety Order.

Dangerous Substance

Polyethylene-core ACM incorporated into a façade can be a dangerous substance; replacement of the complete composite panel can satisfy the duty to replace the dangerous substance (paragraphs 411-425).

Specific Performance

A result-based mandatory order may enforce a repairing covenant where the required result is precise, practicable and just, despite the need for the defendant to design the detailed solution (paragraphs 474-480).

Practice Implications

For Claimants:
Map the façade, lease obligations, statutory control and proposed remedial result. Support urgency, closure and practicability with fire, building and programming evidence.

For Defendants:
Do not rely on historic installation responsibility without proving that the relevant lease provisions survive and answer the present covenant. Obtain early evidence on alternative works, programme, cost and any alleged hardship.

General Practice Points:
Where life-safety remediation is undisputed, parties should consider carrying out urgent work under a reserved-cost arrangement while liability is determined.

Legal Disclaimer

This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.