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ISG has taken housing association Home Group to court over a 拢7.7m unpaid bill for a housing scheme completed in 2022.

The contractor, which is currently in protracted talks over a sale to a South African businessman, filed documents at the High Court against Home Group in March this year.

ISG鈥檚 construction arm claims that Home Group, which owns 55,000 homes across England and Scotland, owes it a total of 拢7.7m plus interest of 15.25% in payment for two residential blocks which it built on Watford High Street in Watford, Hertfordshire. Home Group disputes this and told Housing Today it has acted in accordance with the contract.

The pair signed the design and build contract for the 56-home mixed-use scheme in September 2014. Although it was due to complete in 2016, the scheme did not reach practical completion until February 2022.

On 21 February 2024, Home Group issued what it described as a 鈥渇inal payment notice鈥� (FPN) to ISG stating that the sum owed for the works came to just under 拢718,000, less than 10% of what ISG claimed it was owed in its own final statement issued in early July.

The case is still live and is understood not to have been settled out of court, although proceedings have now been paused until 18 December because ISG failed to comply with pre-action protocol for engineering and construction disputes before issuing proceedings.

Pre-action protocol requires claimants to write to the defendant with clear details of the claim and why it is being made including a summary of the facts and how much money is being requested.

>> See also: ISG鈥檚 prospective new owner 鈥榤eeting senior staff鈥� to outline plans for business

In a court order issued at the Technology and Construction Court by Justice O鈥橣arrell on 26 July, the two parties are said to have 鈥渄isagreed鈥� on whether ISG was correct in starting proceedings without complying to the protocol but agreed that the case should be paused.

If the case is not settled outside of court, Home Group is required to file its defence by 29 January 2025.

Both Home Group and ISG have been contacted for comment.

The case is one of eight which troubled ISG has been involved in since the start of 2024. 

The firm鈥檚 fit-out business is also the defendant in a breach of contract claim with publishing firm Pearson PLC, while its retail arm is involved in a dispute with facades contractor FK Construction Ltd.

Last October, ISG Construction was also the subject of a winding up petition, a legal action used by a creditor against a company which owes it 拢750 or more.

The status of ISG鈥檚 potential sale is currently unknown six weeks after the firm鈥檚 chairman Matt Roche said the deal would be announced 鈥渨ithin days鈥�.

It is understood the hold-up centres on red tape in the US, the base of ISG鈥檚 owner Cathexis, under the country鈥檚 so-called Know Your Client regulations.

The prospective new owners are understood to have been meeting senior ISG staff to reassure them the impending sale is on track and to outline their plans for the business.

A Home Group spokesperson said: 鈥漌e have acted in good faith throughout this process and have paid a price that is correct and in accordance with the agreed contract terms.鈥�