The Government has now published the draft guidance for arbitrators on the exercise of their functions under the Commercial Rent (Coronavirus) Bill ("the Bill"). The guidance confirms that it is a working draft and is being published for the purpose of enabling the Government to engage with stakeholders to further develop the draft. This guidance may therefore, change before the Bill becomes law. The draft guidance provides an initial explanation of the concept of 'viability of a tenant's business', including a non-exhaustive list of evidence that a tenant may use (or the arbitrator may request) to demonstrate viability. This may be helpful for landlords and tenants now in deciding whether to await the Bill's enactment and use the arbitration system or to attempt to reach agreement on the rent arrears now.
The Commercial Rent (Coronavirus) Bill 2022, when it is enacted, will establish an arbitration system to resolve certain unpaid rent debt attributable to the pandemic, enabling an arbitrator to award particular forms of relief from payment, where the matter has not been resolved by agreement between the parties.
The guidance deals with the arbitration process from the perspective of an arbitrator and it confirms that the arbitration process under the Bill can be divided into three stages:
Stage 1 - the pre-arbitration stage
Stage 2 - the arbitrator's assessment of whether the dispute is eligible for arbitration under the Bill
Stage 3 - the arbitrator's assessment of the matter of relief from payment of a protected debt.
It also sets out guidance in relation to making the award, appeals and corrections and the arbitrators fees.
The Government is seeking views on the guidance, in particular in any areas where it is thought further guidance may be needed for arbitrators. The guidance can be found here:
Where certain rent debts (protected rent debts) have fallen due for payment under a business tenancy that has been affected by coronavirus, the question of whether a tenant should be granted relief from payment will, in the absence of agreement, become a matter eligible for determination by an arbitrator.