Highlands and Islands Airports (HIAL) has been granted a full hearing in its £14 million action for damages against Shetlands Islands Council over alleged “defects” in the local authority’s works to extend the runway at Sumburgh Airport.

HIAL, which operates the Shetland airport, entered into a contract with the council in January 2005 for professional services in relation to a runway extension.

However, in November 2011 HIAL raised an action for damages against the council, claiming it was in breach of contract and in breach of its duty of care over “defects” in the provision of its services and its failure to correct those defects.

The case was then delayed because, according to HIAL, the extent of the alleged loss could not then be properly quantified.

Then, in May 2013, HIAL lodged a proposed amendment for payment by Shetlands Islands Council of £14,210,000 with interest, though the local authority argued that by then the prescriptive period for a claim had expired.

At the time, the Lord Ordinary accepted HIAL’s damages claim, a decision which has now been upheld at the Inner House of the Court of Session after an appeal by the council.

Lord Gill added: “If the pursuer when raising this action had simply made its best estimate of its loss on the information then available and had made a formal averment that the sum sued for was a reasonable estimate of the loss and damage sustained by it, the question of time bar would not have arisen.

“The pursuer would then have been free to adjust or amend the claim, even after the expiry of the prescriptive period, in the light of further and better information. That, I think, indicates how contrived the case for the defender is.”