FAST TRACK ARBITRATION/MEDIATION FOR COMMERCIAL LEASES

It has become clear that there are many landlords and tenants of commercial leases who are affected by the Covid 19 closedown meaning that they are unable to access the rented premises either completely or partially. Very many leases are now using the ADLS form which has a specific clause at clause 27 for this situation. The clause does not itself provide for a method of negotiating any reduction in the usual lease payment. It does provide an opening for the parties to negotiate something which will assist both parties in this unusual difficulty.

The ADLS lease specifically provides for arbitration as the method of dispute resolution. On a very specific issue such as the appropriate figure for reducing rental over the closedown period, a formal arbitration would be too complex and expensive for most commercial leases. The vast majority of these leases are for small businesses, who simply do not have the capacity, either as landlords or tenants, to go through a formal arbitration process.

To get through this difficulty I am offering a specific service to assist with the negotiation between landlords and tenants. This comes at a fixed fee of $1000 plus GST, and provides for a mediation process followed by a fast track arbitration to make a decision on the appropriate reduction. The process is by email, with provision for a Zoom session if the parties wish. The process will operate by each party making a submission limited to no more than five pages, with supporting material if necessary. The parties can choose to mediate the dispute, using either a shuttle process between the parties or a Zoom session. If they are unable to reach an agreement, then they agree to let me reach a decision on an appropriate percentage of reduction. As a specific part of the agreement to mediate/arbitrate they agree that brief reasons are required, but not a lengthy decision, and that there will be no appeal. This enables the parties to have some certainty about their position.

To engage with the system the parties should agree to pay half each of the fee which will be held in the AMINZ stakeholder account, and agree that it can be released on either a mediated agreement or decision. The parties will sign the mediation/arbitration agreement, pay the fee and each party will then have time to file their submission. The initiating party will file first, five working days after signing the agreement. The other party then has five working days to respond. The mediator will then attempt to reach an agreement by shuttle mediation. If the parties want a Zoom conference, they will be available for the conference in the next five working days. If they reach an agreement, there will be a mediation agreement signed by each. If they cannot reach an agreement within the five working days, then they agree that the arbitration decision will be made within the following five working days.

You should direct inquiries to me at my email address chris@lahatte.co.nz or call my cell phone at 021 0705236. I can send the agreement and then the parties can sign and initiate the process