The Supreme Court dismissed Fayleigh Limited’s appeal and upheld the High Court’s decision to remit its arbitration dispute with Plazaway Limited, trading as Hotel Partners, to the arbitrator. The Court confirmed that the arbitration had been misconducted because the arbitrator said he would read documents central to Fayleigh’s defence but did not consider them. It did not set aside the award or decide the underlying fee dispute afresh.
Fayleigh leased Trim Castle Hotel and hired Plazaway in 2006 to manage it under a 10-year agreement. Fayleigh claimed that, after a meeting in March 2008, Plazaway agreed to step back from the agreement. Plazaway denied this and argued that the agreement continued until Fayleigh terminated it at the end of the year. It claimed €476,767.56 in management fees, a termination payment and build and design fees. Fayleigh denied liability and counterclaimed for alleged defective and negligent performance.
The arbitrator rejected Fayleigh’s defence and counterclaim and awarded Plazaway the full amount claimed. During the arbitration, Fayleigh produced 17 volumes of documents it had colour-coded to support its account of Plazaway’s activity at the hotel after March 2008. The arbitrator initially said he would read the documents, but barred them from being put to witnesses, citing the delay and cost. In his award, he said he had not admitted the volumes because he considered them inappropriate.
The High Court found misconduct but remitted the matter to the arbitrator instead of setting aside the award. The Supreme Court upheld that finding: Fayleigh was entitled to have the documents considered, and the arbitrator’s failure to do so amounted to misconduct. The Court nevertheless agreed with the High Court’s remedy. It described the documents’ colour-coding as a somewhat peripheral aspect of the case and said the arbitrator could reconsider the relevant findings with an open mind. The arbitrator must consider how to proceed fairly and may seek submissions or take further steps if needed to resolve the matter comprehensively.
Fayleigh also argued after the award that a contractual adjustment should have reduced the relevant fees by 25%. The Supreme Court made no ruling on whether that point, which had not been raised in the arbitration, could independently justify remittal. It said the remittal would allow the arbitrator to consider the calculation and any costs arising from the late-raised issue. The Court said the arbitrator should deal with the matter as soon as possible if the parties do not resolve it themselves.