Commercial rents are only going one way, whether you are on an upwards only or upwards/ downwards lease.


The doubling of annual rents in arbitration is not uncommon in the market, particularly where favourable rents were fixed back in 2011-2012, a low point economically.


The viability of a business model comes under severe pressure when a substantial fixed cost, like rent doubles overnight, along with spiraling labour costs.


If the parties cannot agree on the reviewed rent then most commercial leases provide for the Society of Chartered Surveyors in Ireland (SCSI) to appoint an arbitrator to decide what the reviewed rent should be.  Following submissions from both landlord and tenant on comparable rents the arbitrator delivers an 'award'. 


If the award is not ‘set aside’ by the High Court, then it becomes enforceable just like a Court judgment.


There are time limits to apply to set aside an award: (i) 56 days if the award is contrary to public policy, or more usually (ii) 3 months from the date of receipt of the award.


Generally, the Courts are reluctant to ‘set aside’ arbitrators’ awards. An arbitrator can make a mistake but can still have his award upheld by the Court.


The award can be challenged but only in limited circumstances. Under the Arbitration Act 2010 an arbitrator’s award may only be set aside only if: -


(a)(i) a party to the arbitration was under an ‘incapacity’ or; (ii) the arbitration agreement was not valid under Irish law;


(b)(i) a party was not given proper notice of the appointment of the arbitrator; (ii) a party was not given proper notice of the arbitration or; (iii) a party was otherwise unable to present their case;


(c)the award deals with a dispute not falling within the terms of submission to the arbitration or; (ii) the award contains decisions or matters beyond the scope of the submission to arbitration;


(d)the composition of the arbitral tribunal or appointment procedure was not in accordance with Irish law;


(e)the subject matter of the dispute is not capable of settlement by arbitration under the laws of the State;


(f)the award is in conflict with the public policy of the State;


These are intended to be limited grounds, so as to ensure that arbitral awards are upheld and not challenged very regularly unless the arbitrator has engaged in some fundamental unfairness.


These limited grounds are technical - get legal advice to fully explore your options.