Section 36 of the Arbitration Act 1954 gives the High Court power to refer to an arbitrator for reconsideration any issues on which he has made an award, and provides that unless the court order directs otherwise, the arbitrator shall make his further award within three months of the date of the order.
The High Court considered the extent of that power in the recent case of Catherine McCarrick v The Gaiety (Sligo) Limited, where judgment was delivered by Justice Herbert on April 2 2001.
The matter that came before the court arose out of an arbitration to fix a rent pursuant to a rent review clause under a lease made between the respondent as lessor and the applicant as lessee. The lease was for a term of 35 years from July 20 1989, with rent reviews every fifth year. The lessor sought to review the rent with effect from July 20 1999 and sought a reviewed rent of £10,000 per annum, which was not acceptable to the lessee.
As the parties were unable to agree on what the new rent should be, an arbitrator was appointed to determine it. At a preliminary meeting attended by the solicitors for both parties in early June 2000 it was agreed, among other things, that the arbitrator should make his determination on the basis of written submissions from the parties. The arbitrator fixed June 23 2000 as the date by which the submissions were to be furnished, but although he received a submission from the respondent by that date, he received no submission from the applicant. On July 25 2000 the arbitrator wrote to the solicitors for the applicant advising them that he had inspected the premises and that in the absence of any submission from them he proposed to make his award. On August 2 2000 the arbitrator notified the solicitors for both parties that he had prepared his final award and would issue his award subject to payment of his fees. However, on August 4 the arbitrator received from the applicant's solicitors a submission dated July 27 2000 in the form of a report from an auctioneer and valuer. Having regard to his earlier direction, the arbitrator issued his award on August 22 2000 on receipt of payment of his fees from the respondent. The applicant applied to the High Court for an order pursuant to Section 36(1) of the Arbitration Act 1954 directing that the award be remitted to the arbitrator for his further consideration in light of the applicant's submission.
Herbert said that although Section 36(1) of the 1954 act was extremely comprehensive, the court must exercise some restraint in exercising the unlimited discretion afforded to the court by this section. If this was not done, legality would be preferred to finality and the court would become embroiled to a wholly unacceptable degree in the contractual arrangements and agreements of the party. In approaching the issue before him in this way Herbert was reinforcing the unanimous decision of the five judges of the Supreme Court in Keenan v Shield Insurance Company Limited (1989) IR 89 that arbitration awards ought to be regarded as final in all respects, and should only be interfered with if there was misconduct on the part of the arbitrator or if there was an error in law so fundamental that it could not be allowed to stand.
On the basis of the evidence furnished to him, Herbert said that what occurred in the case before him was a procedural mishap similar to what had occurred in King v Thomas McKenna Limited (1991) 1 All ER 653, and through no fault of the arbitrator or of the respondent the applicant had not received a fair hearing. He went on to say that the possible injustice which the applicant might suffer both now and in the future should the award not be remitted exceeded any risk of detriment to the respondent. Accordingly Herbert remitted the award for reconsideration by the arbitrator upon certain terms.
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