An Aberdeen oil tycoon has been given the green light to pursue a case which could result in one of the largest payouts ever awarded in Scotland’s courts.

Robert Kidd is seeking compensation of £156 million for what he claims was a botched business deal involving his drilling firm ITS Tubular Services.

The businessman claims there was a conflict of interest with the lawyers involved in the deal and previously secured a settlement of £19m with legal firm Burness Paull.

He then tried to pursue further action against Aberdeen law firm Ledingham Chalmers, US private equity house Lime Rock Partners and a number of individuals from both organisations, but the case was initially rejected by the court.

The Court of Session has now overturned that decision on appeal, allowing the case to proceed in the commercial court.

A spokesman for Mr Kidd said: “Mr Kidd is very happy with the outcome of the appeal and now looks forward to progressing his claim.”

Ledingham Chalmers said the case is “unfounded”.

The legal dispute centres on a deal that saw Mr Kidd sell Lime Rock a £34.5m stake in ITS more than a decade ago.

Following the investment, he retained a majority shareholding in the business, which he had set up in the mid-eighties, but in 2013 resigned as its chairman and chief executive after falling out with his investors.

The firm then went into administration with debts of around £145m later that year.

Mr Kidd believes that the decline of the firm was a result of his solicitor “acting wrongfully” by representing both his business and Lime Rock.

He claims that the defenders in the current case were aware of this wrongdoing and conspired “to facilitate the breach of fiduciary duty and fraudulently achieve the completion of the transaction”.

The appeal decision states that Mr Kidd asserts that they “led him to believe that he was in receipt of independent ‘arms-length’ advice”.

It adds: "But for this he would not have completed the transaction and would not have suffered the loss of the value of his shareholding."

The case was initially rejected as the businessman had already received the settlement from Burness Paull, who took over Paull & Williamsons, the firm who acted in the deal.

However, Lord Justice Clerk Lady Dorrian, Lord Malcolm and Lord Turnbull have now ruled that he should be allowed to pursue further compensation.

Lord Malcolm stated: "There is nothing in the agreement, nor in the relevant circumstances, nor in averment which allows one to say with any confidence that, having been paid £19m inclusive of expenses, Mr Kidd has received all that he is entitled to receive in respect of the claim.

"In other words that there is now no loss or damage which can found a claim against the current defenders."

Jennifer Young, managing partner of Ledingham Chalmers, said the firm is considering the judgment.

She added: "The only other comment we’d make is that the firm holds itself to the highest of ethical and professional standards.

"We believe these allegations are unfounded."

The Herald tried to contact Lime Rock but did not hear back from the firm.

Earlier this year, Mr Kidd also received a settlement from legal firm Levy &McRae, who represented him in the case against Burness Paull, after claiming he had been over-billed.

The firm charged him £6 million in fees for acting the case, with the charges being declared illegal by a judge in 2020.

He sued for £3m, but the case was settled out of court.