A legal dispute over the refusal of the Royal College of Surgeons in Ireland (RCSI) to agree to Eircom assigning its interest in RCSI-owned premises at St Stephen's Green in Dublin to Bernard McNamara's Radora Developments Ltd has been settled.

The RCSI had alleged non-disclosure by Eircom in relation to the real intention of the proposed assignment. It claimed Eircom initially sought consent to assign the interest in the premises on the basis that Radora intended to use the property for office use when, it was claimed, Eircom knew Radora intended to acquire the lease for the purpose of re-developing the property.

In those circumstances, the RCSI claimed Eircom was guilty of advancing an inaccurate and misleading application, and it also alleged default by Eircom of repairing covenants in the leases. Denying those claims, Eircom contended Radora was "well known" to the RCSI and that the RCSI had evinced a willingness to join Radora in a joint venture involving the redevelopment and subsequent disposition of the property.

Eircom also denied claims by the RCSI that the assignment of the lease would lead to a very substantial reduction in the value of the RCSI investment in the premises. The RCSI had claimed the alleged reduction would not be resolved by a guarantee capped at €19.5 million.

Eircom Ltd and its subsidiary, Gofree Ltd, had brought proceedings against the RCSI, alleging it had unreasonably refused its consent for assignment of the lease of the premises. The case was due to open before Mr Justice Peter Kelly in the Commercial Court this week but, after day-long talks between the sides, he was told yesterday that the action had been settled.