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1. The applicant lessee in this case by a Special Summons issued on the 11th October, 2000, seeks an order of the court pursuant to Section 36(1) of the Arbitration Act, 1954. This Section provides as follows:-

2. As was pointed out by McCarthy, J., in Keenan -v- Shield Insurance Company Limited , (1988) I.R., 89 at 93, this Legislation, "took as its model the English Acts of 1889 and 1950." The only difference in the text of Section 22(1) of the English Arbitration Act, 1950 and the above Section is that in place of the word, "the Court" , in the above Section, the antecedent English equivalent uses the words, "the High Court or a judge thereof."

3. This claim arises out of an Arbitration to determine, upon rent review, the Current Market Rent of a premises at Wine Street, Sligo, held by the Applicant/Lessee under an Indenture of Lease made the 12th day of July, 1991 for a term of 35 years from the 20th July, 1989, with rent reviews every fifth year. By a Notice dated the 24th June, 1999 the Respondent/Lessor claimed a reviewed rent of £10,000 per annum for the period of five years commencing on the 20th July, 1999. This was not acceptable to the applicant lessee.

4. The parties failed to agree upon an Arbitrator and under the terms of the Lease the President of the Law Society of Ireland nominated Patrick O'Connor to act as Arbitrator and Mr O'Connor consented to act. The Applicant/Lessee was represented by Mr Joseph Carter, Solicitor and the Respondent/Lessor by Mr Michael J. Horan, Solicitor, both of whom attended a preliminary meeting with the Arbitrator on the 1st June, 2000 where, inter alia, it was agreed that:-

5. Consequently the presentation or non-presentation of these submissions and reports was a matter of primary importance to both parties. By letter dated 2nd June, 2000 the Arbitrator gave the following directions amongst others:-

6. It was conceded at the hearing of this application that the submissions of the Respondent lessor, dated 20th June, 2000, were furnished to the Applicant/Lessee's Solicitors and to the Arbitrator on the 22nd June, 2000. It was further conceded by the parties that the submissions on behalf of the Applicant/Lessee were not exchanged or submitted within the time stipulated by the Arbitrator.

7. By a letter dated the 25th July, 2000 the Arbitrator wrote as follows to the Solicitors for the Applicant/Lessee:-

8. This letter illicited no response whatsoever and no application was made for an extension of time for the delivery of submissions on behalf of the Applicant/Lessee.

9. By a letter dated 2nd August, 2000 the Arbitrator notified the Solicitors for both parties that he had prepared his final Award and would submit the same upon payment of his fees, costs and outlay as particularised. On the 4th August, 2000 the Arbitrator received from the Solicitors for the Applicant/Lessee submissions dated the 27th July, 2000 in the form of a Report from an Auctioneer and Valuer. By letter dated the 4th August, 2000 the Arbitrator responded as follows:-

10. On the 22nd August, 2000 the Solicitors for the Respondent/Lessor discharged the Arbitrator's Bill of Costs and under cover of a letter dated 24th August were furnished with two copies of the final Award dated 1st August, 2000.

11. No explanation whatsoever of what occurred or rather what did not occur in this case is offered in the Affidavit grounding this application. However, the Court was informed by Counsel for the Applicant/Lessee that the reason why Submissions were not furnished within the time stipulated by the Arbitrator, that is not later than 5.00 pm on Friday 23/6/2000, or even prior to Monday 31st July, 2000, the start of the week in which the Arbitrator, by his letter of 25th July, 2000 indicated that he would make his determination, was an error in the nature of an oversight on the part of those acting on behalf of the Applicant/Lessee. This was not challenged or disputed by Counsel for the Respondent/Lessor.

12. In these circumstances I believe that the Court is entitled to conclude that the failure to furnish submissions on behalf of the Applicant/Lessee within the time stipulated by the Arbitrator, or in any event prior to the making of the final Award, and the failure to apply to the Arbitrator for an extension of time within which to furnish such Submissions, did not arise from a deliberate and conscious decision on the part of the Applicant/Lessee or her advisers not to furnish written Submissions a decision from which it is now sought to resile with a view to having the matter reconsidered and redetermined in the light of the Submissions now sought to be made. The failure to furnish Submissions was entirely due to inaction on the part of the advisers of the Applicant/Lessee.

13. Counsel for the Applicant/Lessee submitted to the Court that what most regrettably occurred in this instance amounts to a "procedural mishap" which resulted in the contentions and evidence on behalf of the Applicant/Lessee not being considered by the Arbitrator, and that there being no oral evidence in the matter it would be unjust to the Applicant/Lessee that the Award, which Counsel does not dispute was properly made by the Arbitrator, without error, mistake or misconduct, should be permitted to stand. Counsel submitted that in such circumstances, on the authority of King and Anor -v- Thomas McKenna Limited and Anor (1991) 1.A.E.R., 653, a unanimous decision of the Court of Appeal in England, Lord Donaldson of Lymington, M.R., Ralph Gibson and Nicholls, L.J.J., that the Court should exercise the discretion vested in it by Section 36(1) of the Arbitration Act, 1954, and remit the entire matter to the reconsideration of the Arbitrator.

14. In that case, after a very careful and comprehensive review of the authorities, including the previous decisions of the Court of Appeal in Re: Keighley Maxsted and Company -v- Bryan Durant and Company (1893) 1. Q.B., 405 and Re: Montgomery Jones and Company -v- Liebenthal and Company , (1898), 78 L.T. 406 and as the Court was not referred to and did not remind itself of any decision of the House of Lords on the issue, the Learned Master of the Rolls concluded that the authorities were not decisive in the matter and went on to hold as follows at pages 660 and 661 of the Report:-

15. The Master of the Rolls further suggested that there was no reason why self-imposed boundaries to intervention operated by the Courts in the past, if that indeed was the case, should continue to be accepted as binding by the Courts today.

16. Though the language of Section 36(1) of the Arbitration Act, 1954, is extremely comprehensive, in my judgment this Court must exercise some restraint in exercising the unlimited discretion afforded by the Section or, to reverse the above expression of Diplock, J., (as he then was), "legality" would be preferred to "finality" and the Court would become embroiled to a wholly unacceptable degree in the contractual arrangements and agreements of parties. As was stated by McCarthy, J., in Keenan -v- Shield Insurance Company Limited , (1988) I.R. 89 at 96, "It would ill-become the Court to show any readiness to interfere". However, in my judgment this decision is not authority for the proposition that the Court, defined by Section 2(1) of the Act, as meaning, "The High Court", should in all cases limit the exercise of its power to remit under Section 36(1) of the Act to one of the following four circumstances:

17. At page 95 of the Report in Keenan v. Shield Insurance Company Limited , (above cited), McCarthy, J., further held as follows:-

18. In my judgment the Supreme Court in this case did not purport to determine the question of the general application of Section 36(1) and the issue was not argued before the Court. This is clear from the above cited passage from the judgment of McCarthy, J., with whose judgment the remainder of the Court, Finlay, C.J., and Walsh, Griffin and Hederman, JJ., agreed. Subject to the above mentioned cautions I cannot see any imperative of policy, reason or justice which should cause this Court to set any permanent inflexible and immutable limits to the exercise of the wide power conferred upon it by the Oireachtas in Section 36(1) of the Act for the obvious purpose of ensuring justice and fairness between parties within the arbitration framework.

19. The decision in King and Another v. Thomas McKenna Limited and Another (1991) 1 A.E.R. 653 which was applied by Colman, J., in the Queen’s Bench Division, (Commercial Court) in Cobelfret N. V. v. Cyclades Shipping Company Limited (the “ Linardos”), (1994) 1 Lloyd’s Law Reports 2837 is, of course, only a persuasive authority in this Court, but one from which I should be very slow to differ unless there was a contrary decision of the Supreme Court, or of this Court or in the House of Lords. So far as I am aware the decision of the Court of Appeal has not been distinguished or overruled by the House of Lords as of the date of this judgment.

20. Counsel for the Respondent/Lessor reminded the Court of the decision of the Supreme Court in the case of In the Matter of the Arbitration Acts, 1954 to 1980 and In the Matter of an Arbitration, Tobin and Twomey Services Limited v. Kerry Foods Limited ( formerly W.L. Miller and Son Limited) (1996) 2 I.L.R.M. 6, and submitted that this case is authority for the proposition that the power of this Court under Section 36(1) of the Arbitration Act, 1954, to intervene is limited to the four circumstances to which I have already adverted. Consequently, Counsel argued, that as the present case does not fall within any of these four headings, - and in this respect the Court accepts the submission of Counsel, - the Court should not exercise the power to remit the matter for reconsideration by the Arbitrator, however unfortunate the circumstances. Counsel further submitted that even if the Court should otherwise be disposed to exercise the power to remit, it should not do so in this instance as the fault lay entirely with the applicant lessee and her advisors. Counsel also submitted, but I understood this to be very much by way of a subsidiary submission, that the Arbitrator, having inspected the premises himself as recited in his final Award, was unlikely to be materially influenced or to alter his determination on a perusal of the Submissions upon behalf of the Applicant/Lessee.

21. In my judgment this last argument of Counsel for the Respondent/Lessor has little merit. In the Second Schedule at paragraph (e) of the Indenture of Lease it is provided that in default of agreement between the parties or their Valuers, the amount of the Current Market Rent is to be referred to the decision of a single Arbitrator and the provisions of the Arbitration Act, 1954, are to apply to any such reference. Notwithstanding that at the preliminary meeting on the 1st of June, 2000 the parties agreed to adopt a valuation type arbitral process, whereby each party would furnish written submissions including reports of experts upon which the Arbitrator would make his Award without oral evidence, the Arbitrator must still act judicially and reach his conclusions in accordance with the evidence. Under the agreement of the parties the Arbitrator was entitled to inspect the subject premises and the property cited as comparables. The written Submissions of the Respondent/Lessor, which in the events which occurred, was the only evidence before the Arbitrator, assessed the Rent at £8,250 per annum. This was also the sum determined by the Arbitrator in his Award. The Valuation which would have formed the Submission on behalf of the Applicant/Lessee assesses the rent at £6,600 per annum.

22. The role of Arbitrator in circumstances such as those pertaining to the present Arbitration was deliminated by Lord Denning, M.R. in Fox v. P.G. Welfair Limited , (1981), 2 Lloyd’s Reports 514 at 522:-

23. In the circumstances, I could not conclude that the Applicant/Lessee’s submissions had they been before the Arbitrator would not have materially altered the outcome of the arbitration. The Arbitrator may well have arrived at the same Award but then he might not.

24. As regards the question of “ fault”, in the context of an application to remit to an Arbitrator, what was held in Sokratis Rokopoulos v. Esperia S.P.A ., “ the Aros” (1987) 1 Lloyd’s Reports, 456, in this regard, in my judgment also represents the law in this Jurisdiction. In that case Brandon, J., stated at pages 463, 464 of the Report as follows:-

25. Accordingly, it was unnecessary for the Supreme Court to determine the wider issue and in my judgment Mr. Justice Blayney did not purport so to do by adopting the statement of O’Hanlon, J. in his judgment in the case of Portsmouth Arms Hotel Limited v. Enniscorthy Urban District Council (14/10/1994: unreported/judgment available, 1993 No. 6381P.).

26. From the approved copy of the judgment in that case it does not appear that the matter of the exercise by the Court of the power vested in it by Section 36(1) of the Arbitration Act, 1954, was fully argued before Mr. Justice O’Hanlon. It does appear from the judgment that O’Hanlon, J., concluded on the evidence that the basis upon which remission was sought in that case did not fall within any of the four traditional grounds upon which the Court had in the past undoubtedly exercised its jurisdiction to remit.

27. At page 9 of the judgment, Mr. Justice O’Hanlon stated as follows:-

28. I think it is important to note that Mr. Justice O’Hanlon did not say “ conclusively considered”, or use any expression indicating that the occasions for intervention by the Court under the Section had been fully and irrevocably determined.

29. It appears from the judgment that the only authority cited to Mr. Justice O’Hanlon, or at least the only authority to which he considered it pertinent to refer, was Montgomery Jones and Company v. Liebenthal and Company , (1898) 78 L.T. 406 per Chitty L.J., at 409. With respect to that Judgment, Lord Donaldson M.R. in King and Another v. Thomas McKenna Limited and Another , (above cited), pointed out that it was not necessary for the Court of Appeal to decide the points in that case: he held at page 658 of the Report as follows:-

30. This Court has not been referred to and is not aware of any decision in the Supreme Court on the matter since the case of Tobin and Twomey Services v. Kerry Foods Limited (above cited). In my judgment, the occasions upon which this Court will exercise its discretion to remit matters referred or any of them to the reconsideration of the Arbitrator remain open, but very limited. It is not necessary or indeed appropriate for the Court to put the matter further than this.

31. In my judgment, on the basis of such evidence as has been put before the Court and to which I have already made reference, what occurred in this case was a procedural mishap similar to what occurred in King and Another v. Thomas McKenna Limited and Another (above cited), and in “The Linardos”, (above cited) and through no fault of the Arbitrator or of the Respondent/Lessor the Applicant/Lessee has not received a fair hearing. In the former case the facts were that Counsel did not make known to the Arbitrator the existence of a “sealed offer” which exceeded the amount of the Award with the result that the Arbitrator awarded the costs of the “ protracted and accordingly costly arbitration”, against the Building Owners when he should have awarded them against the Contractors. In the latter case, Colman, J., (at page 37 of the Report) took the view that:

32. In my judgment the possible injustice which the Applicant/Lessee may suffer, now and in the future should this Award not be remitted to the reconsideration of the Arbitrator exceeds any risk of detriment to the Respondent/Lessor. The determination of the review rent obviously impacts upon the viability of the business, may be a basis for future rent reviews, and is clearly relevant to such matters as leasehold enfranchisement and the sale value of the Lessee’s interest in the property. The Respondent/Lessor is contractually only entitled on review to the current market rent defined in the Second Schedule of the Indenture of Lease as, “ the full gross market rent value without any deduction whatsoever at which the premises in its present state might reasonably be expected to be let ....... in the open market without a fine or a premium as between a willing lessor and a willing lessee and with vacant possession .....”, and not to a “ windfall”, to borrow the expression of Hubhouse, J., in King and Another v. Thomas McKenna Limited and Another (above cited). In addition the position of the Respondent/Lessor may be protected by “ strict terms with regard to costs and other matters”.

33. In my judgment therefore the matter will be remitted to the reconsideration of the Arbitrator upon the following terms:-