Alternative Dispute Resolution

In most commercial contracts there are dispute resolution clauses which govern how parties are to try and resolve disputes. A recent High Court case demonstrates the importance of following the dispute resolution process set out in contracts, rather than simply reverting straight to Court.

On 28 August 2021, the COVID-19 Response (Management Measures) Legislation Bill (“the Bill”) was passed, and the Bill will be rubber stamped into the law shortly. Somewhat surprisingly, the Bill introduces a new “rent reduction in an emergency” clause which will function as the default “rent reduction” clause for leases that do not already have one. This article discusses what the Bill means for landlords and tenants in the commercial space.

Commercial leases have been in the spotlight during COVID-19. With many tenants unable to operate from their premises during the Alert Level 4 (and 3 to a lesser extent), resulting in a loss of revenue, the Government has been encouraging landlords to negotiate with tenants. On 4 June 2020, the Government announced that small business commercial tenants and landlords who cannot reach agreement on a fair reduction in rent will enter into a subsidised, compulsory arbitration process.