The Appeals Court today rejected an unjust enrichment appeal brought by the City of Prague in the Skoda Palace case. Today’s decision is the second of two appeal rejections and the fourth of four losses that the City has endured since launching litigation in 2013. Despite the fact that Copa Retail has won in court, it is still willing to conduct settlement talks if the City so wishes, as it believes a solution exists. However should the two parties meet, Copa Retail hopes that the City will reach clarity about their need for the purchase option in the current lease contract.
“The City recently told me they expect a contract where they pay less, but maintain the purchase option; this is unrealistic. The only way the City today will pay lower rent is if they give up the purchase option along with all the other unusual lease clauses. What they in fact told us is that they don’t know if they need the purchase option or not, they in fact have no idea what they need, so shouldn’t they make a decision? Does it make sense to pay higher rent now because the City has no idea if they want to buy the property or not?” said Abigail Schaeffer, Member of the Board of Guyana Holdings, the majority owner of Skoda Palace.
„The City has a purchase option in its lease that allows it to buy the building at an uncertain price within the last five years of its lease. It is this clause plus several others that leads to a higher rent being charged than otherwise. The City has lost at every instance in court, spent millions of crowns in court and legal fees and rejected a rent reduction worth over 500 million CZK. There’s a big difference between paying for something because you know you need it as opposed to wanting it because you can’t make a decision if you really need it or not, ” concludes Ms. Schaeffer.