An award has been recently handed down in the case of FAC 251 Ltd and Zecol Ltd v Silver Pagoda Realty Group Ltd. Michael Wilson, an Associate Solicitor in the Commercial Litigation team, acted for the successful Respondent.
The case involved FAC 251 who are commercial tenants of Silver Pagoda, and significant rental arrears that they had accrued during the corona virus pandemic which they had referred to arbitration. A preliminary issue was ordered by the arbitrator, Mr Barry Denyer-Green of Falcon Chambers, as to whether a referral for arbitration had been made by the deadline date due under the Commercial Rent (Coronavirus) Act 2002. The Applicant had referred the matter to the arbitrator by way of email and by post on the deadline date, however, the arbitrator did not receive the referral until several days later.
The principal issue was whether there had been deemed delivery of the referral. The Applicant relied upon the Recorded Delivery Service Act 1962 and associated caselaw. The arbitrator, however, agreed that these points did not assist in determining the issue. The arbitrator further considered the application of section 7 of the Interpretation Act 1978, which provides that where an Act requires or authorises any document to be served by post, then unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary intention is proved, service is deemed effective at the time at which a letter would be delivered in the ordinary course of post. The arbitrator found that the contrary intention was proven, as the application was not physically received by the deadline date.
The case is noteworthy for the fact that the Respondent was successful in obtaining an award that the Applicant would pay its costs of defending the matter. Pursuant to Section 19(7) of the 2022 Act the usual position is that parties engaged in arbitration pursuant to the 2022 Act must meet their own legal or other costs. Despite this, the arbitrator agreed with the Respondent’s submissions that the construction of section 19(7) was not sufficiently wide as to include an agreement on legal costs, for the purposes of section 61(2) of the Arbitration Act 1996, where the issue was one of competence within the meaning of section 30 of the 1996 Act, and outside the objectives and purposes of the 2022 Act.
A copy of the award is available here.
Our Commercial Litigation team has wide experience of dealing with commercial property disputes and would be very happy to discuss any similar cases with clients. You can get in touch with the team here.
