Landowner Resolution is lodging papers with the Court of Session after the city council planning committee approved a bid for a £30 million expansion of the east Edinburgh site.
Councillors went against a cap on shopping floorspace imposed on Fort Kinnaird in order to allow an extension of around ten per cent to the Newcraighall shopping centre in December.
Resolution is demanding a judicial review which could result in the decision being reversed and may prove costly for the city council. Fort Kinnaird retail park, which employs about 1300 people, is expected to create about 400 jobs and additional turnover of £22m.
The legal bid from Resolution follows protests against the expansion from city centre retailers, including John Lewis and the St James Centre, which said more trade would be taken away from central Edinburgh.
Firms cannot object to a planning decision on the basis that it might harm their business, but they commonly claim that councillors may not have been in possession of the full facts when they made the decision.
Robin Holder, planning agent acting for Resolution, said: “Resolution Property acquired Ocean Terminal in January 2012. It has recently come to our attention that Edinburgh council has granted planning permission for a significant increase in retail floorspace at Fort Kinnaird.
“This came as a surprise as we had been led to understand that the council’s policy was to maintain a strict cap on shopping floorspace in this location. The cap was applied in order to retain the competitive equilibrium between Edinburgh’s commercial centres, and this recent permission risks creating a significant imbalance.”
He added: “Resolution Property has reluctantly issued a petition for judicial review of the planning permission that has been granted.”
Councillors were aware of the retail cap – placed on Fort Kinnaird in the mid-2000s to protect town-centre shopping – but chose to grant an exemption.
The council’s own report into the proposal agreed the Fort Kinnaird development would have an impact on city centre retail, but it suggested the “worst-case” scenario would only see 0.6 per cent of city centre trade diverted to the expanded centre.
Jim Lowrie, the city’s planning leader, said: “We don’t want a huge amount of out-of-town expansion because it does impact on local town centres.
“However, the ones there already do need a little room to manoeuvre. We anticipate Ocean Terminal will itself seek to expand in the future.”
Resolution is awaiting a date for the hearing.
British Land, which owns Fort Kinnaird, declined to comment.