A company backed by property developer Johnny Ronan is bidding to overturn a High Court ruling that ended up saving Bewley's Cafe on Grafton Street in Dublin more than €700,000 a year in rent.

Last year, Mr Justice Peter Charleton ruled that the cafe's lease allowed it to reduce the €1.46 million rent it was paying its landlord, Ickendel Ltd, in which Mr Ronan is a shareholder. As a result, Bewley's rent was cut to €728,187 a year after the pair went into arbitration last July.

Five-yearly review
The dispute broke out after the rent came up for a five-yearly review in 2012 and the landlord refused to cut the €1.46 million figure set in 2007. Bewley's said it was losing €700,000 a year and added that four years of recession had depressed Grafton Street rents by 52 per cent.

Ickendel appealed Mr Justice Charleton's ruling yesterday in the Supreme Court, where its lawyers argued the judge was "in error" when he found the lease allowed Bewley's to seek to have the rent cut in line with the open market when it came up for review.

Mr Justice Charleton had said that an ambiguity in the lease meant that the rent could be varied in line with the market, but could not fall below IR£168,000 – the amount first fixed when the parties agreed terms in 1987.

Ickendel argued yesterday that the lease’s relevant clauses boiled down to stating that when the rent was reviewed every five years it should be the higher of either the market rate or the amount paid during the preceding period.

In response, Bewley’s said the phrase “preceding period” referred to the rent set in 1987. “That is what the landlord gets in ’87, the protection of the fact that the rent cannot go down from that level,” it said.

The National Asset Management Agency, to which Ickendel owed €19.7 million at the end of 2012, gave the company the go-ahead to appeal the original judgment last year.

Irish group Campbell Bewley owns Bewley's Cafe.

The five-judge Supreme Court reserved judgment on Ickendel’s appeal yesterday.