Forte is being sued by the owner of its Posthouse hotel in York because of allegations that the hotel has been badly managed.
Burford UK Properties has issued a writ against Forte Hotels (UK) because it believes the company has allowed the hotel to become dated, offering only "low grade" accommodation.
Burford is upset because the rent it receives from Forte depends on how much money the hotel makes.
The writ alleges that poor sales techniques, inefficient management and a failure to refurbish the property have caused the hotel to make less money than it otherwise would have.
According to the writ, the £69-a-night room rate is at the bottom of the Posthouse price range, and the hotel has offered discounts "after very little buyer pressure".
The writ says that if Forte had tried harder to maximise earnings at the hotel the rent would have been fixed at £859,172 a year for 14 years from 1999. No final rent for this period has yet been agreed, it adds.
Burford is suing parent company Forte as well as Forte Hotels.
Neither Burford nor Forte would comment further on the case.