In the context of a landlord and tenant dispute in respect of an agricultural tenancy, a professional arbitrator’s ‘unimpressive’ reasoning was ‘just about enough’ to enable the parties to understand his decision and to avoid substantial injustice to either party, the High Court has ruled.
The tenant had succeeded to the tenancy of a 605-acre farm, complete with a farmhouse and agricultural buildings, by operation of section 53(7) Agricultural Holdings Act 1986. A dispute as to the reasonable rent payable for the holding was put to arbitration.
In his award, the arbitrator ruled under section 48(9) that £34,800 was the rent that might reasonably be expected to be paid by a prudent and willing tenant to a prudent and willing landlord. The arbitrator, among other things, accepted the tenant’s plea that building works carried out by his predecessor should be excluded from the rent assessment and the award was substantially lower than the landlord had contended for.
On appeal to the High Court, the landlord argued that the arbitration process had been infected by serious irregularities. It was submitted that the reasons given by the arbitrator in respect of a number of issues were so deficient that the landlord had suffered substantial prejudice. A direction was sought either overturning the award in its entirety or remitting the dispute, in whole or in part, to the arbitrator for reconsideration.
Having analysed the criticisms of the arbitrator’s decision, the court described his reasoning as ‘poor’ and ‘unimpressive’ and noted that the paucity of reasoning had placed a ‘considerable burden’ on the court. However, in dismissing the landlord’s appeal, the court ruled that the arbitrator’s reasoning was ‘just’ adequate to enable understanding and avoid substantial prejudice.