DEVELOPERS building rival shopping centres made a €4m pact not to object to planning permission against each other's plans.
However, now one of them is trying to stop €3m of that being paid because an objection has been placed against their development.
The High Court heard yesterday that the two firms - Galway-based Talebury Properties Ltd and Parolen Ltd of Ashbourne, Co Meath - were developing rival shopping centres in Drogheda, Co Louth, in 2003.
Declan McGrath, counsel for Talebury of Kitty Hall, Edward Hall, Co Galway, said the company had found out that Parolen had lodged a number of objections and appeals to various applications for planning permissions which Talebury had made to Drogheda Borough Council.
Both developers had on August 21, 2003 entered into a written agreement in which Parolen said it would withdraw its existing appeals and objections.
The company also agreed it would not initiate any future objections or encourage or help anyone else to do so.
In consideration for the undertakings, Talebury had agreed to give Parolen two payments which would be guaranteed by Anglo Irish Bank Corporation plc.
Mr McGrath told Ms Justice Mary Laffoy that the first had guaranteed €1m by AIB on behalf of Talebury within 60 days of the date of the agreement, August 21, 2003.
This amount had been duly drawn down by Parolen. The agreement had further provided for a second guarantee to be given in the sum of €3m which would be available for draw-down on the fourth anniversary of the agreement - August 21, 2007.
Mr McGrath said Talebury was seeking an injunction restraining Anglo Irish Bank from paying out on foot of the €3m guarantee pending completion of the legal proceedings before the court.
He said Talebury claimed Parolen had breached the agreement not to lodge further objection.
Edward McGovern, of Laurence Street, Drogheda, had in July last year appealed to An Bord Pleanala a planning permission granted by Drogheda Borough Council to Talebury regarding its lands.
Mr McGrath said it was Talebury's case that Parolen had either directly or indirectly initiated or encouraged the appeal.
He said there was no allegation of wrongdoing against Anglo Irish Bank Corporation and in no way was the reputation of the bank impugned by Talebury Properties Ltd.
Judge Laffoy, granting the injunction restraining the paydown of the €3m until all of the issues in the proceedings had been determined by the court, said that there was a huge conflict of fact in the evidence placed before her and that it was not the court's function at this stage to express any view on the merits of the case.