Peab settles Mall of Scandinavia dispute for US$100 million

Exterior view of the Mall of Scandanavia in Sweden. (Image: Adobe Stock)

The dispute stemmed from Peab’s role as turnkey contractor on the 100,000m² retail complex, said to be one of the Nordics’ largest commercial developments.

The complaint centred on modifications to the original contract, delays, and cost overruns that Peab claimed were never fully compensated.

In 2023, an arbitral tribunal awarded Peab approximately SEK 1.4 billion ($145 million) in compensation for increased construction costs, plus SEK 390 million ($40 million) in interest for delayed payment. URW challenged the decision, triggering further litigation.

Sweden’s Svea Court of Appeal largely upheld the tribunal’s decision in May 2025. But with no payment received, Peab filed for bankruptcy proceedings against URW subsidiary Rodamco Projekt on 30 May. URW then signalled it would initiate a fresh arbitration for liquidated damages. Peab, in turn, said it would seek recovery of legal fees.

The new agreement, signed 22 June, puts an end to all legal processes. Peab will receive the SEK 1 billion ($103 million) settlement from URW on 2 July 2025, and both sides have agreed to drop all claims, including those relating to warranty liability and interest. Peab confirmed the net payment reflects the original construction cost award but excludes accrued interest.

“It feels extremely good that we can finally put the legal aftermath of the Mall of Scandinavia behind us,” said Jesper Göransson, president and CEO of Peab. “We received the compensation for the contract that we were entitled to according to the agreement and legal rulings.”

Peab said the settlement will boost its available liquidity by SEK 1 billion ($103 million) in the third quarter of 2025. Second-quarter financials will reflect a one-time charge of approximately SEK 600 million ($62 million), while net debt remains unchanged.

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