XX v YY (Commercial Rent (Coronavirus) Act 2022 protected rent debt arbitration)
Chartered Institute of Arbitrators (CIArb) · Commercial rent (Coronavirus) Act · England and Wales · 27 July 2023
Why it matters
A worked example of the bespoke arbitration scheme created by the Commercial Rent (Coronavirus) Act 2022 to resolve ring-fenced Covid rent arrears. CIArb administers and publishes these awards in anonymised form under section 18. It shows the mechanics in practice: a protected rent debt assessed, part written off by agreement, and the balance rescheduled into instalments, with each side bearing its own costs as the Act requires. For UK practitioners it is a concrete model of statutory rent-relief arbitration and the settlement awards it produces.
Summary
This is a final award by agreement in a statutory arbitration under the Commercial Rent (Coronavirus) Act 2022, the scheme Parliament created to deal with rent that built up while businesses were ordered to close during the pandemic, known as 'protected rent debt'. The tenant (referred to as XX) applied in September 2022 for relief from a protected rent debt owed to its landlord (YY) on commercial premises let under a 2018 lease. The President of the Chartered Institute of Arbitrators appointed a sole arbitrator in February 2023. Rather than fight it out, the parties negotiated: a procedural order by consent in May 2023 fixed English law, a London seat and the English language, and by June and July 2023 they had agreed terms. The arbitrator reviewed and approved those terms and issued this award to make them binding. On the numbers, the protected rent debt including service charge arrears for the period 31 July 2020 to 18 July 2021 was assessed at £850,409.73 including VAT. The landlord agreed to waive £408,725.57 of that, and the tenant agreed to pay the balance of £441,684.17 in eighteen equal monthly instalments of £24,538.01, starting 24 August 2023. Following the Act, each party bears its own legal costs, and the tenant bears the £6,000 of CIArb and tribunal fees. Under section 18 of the 2022 Act an anonymised version of the award is published on the CIArb website, which is why it is publicly available. It is a clean illustration of how the Covid rent-arbitration scheme works in practice and how a negotiated outcome is turned into an enforceable award.
The detail
Parties: Applicant/Tenant (XX) v Respondent/Landlord (YY); parties anonymised under section 18 of the 2022 Act.
Case number: CIArb DAS Case No. 01375-S2S1P
Outcome: Final award by agreement. The protected rent debt for 31 July 2020 to 18 July 2021 was assessed at £850,409.73 (incl VAT); the landlord waived £408,725.57; the tenant is to pay £441,684.17 over 18 monthly instalments of £24,538.01 from 24 August 2023. Each party bears its own costs under s.19(7); the tenant bears the £6,000 CIArb and tribunal costs.
Quantum: £441,684.17 payable, of £850,409.73 assessed, with £408,725.57 waived.
Applicable law: Commercial Rent (Coronavirus) Act 2022 (ss.10, 18, 19); English law as the law of the lease; seat of arbitration London.
Issues in play: The statutory arbitration scheme for pandemic-era 'protected rent debt': how an arbitrator grants relief from rent that accrued while a business was forced to close, balancing the tenant's viability against the landlord's right to payment.
Read the full decision at Chartered Institute of Arbitrators (CIArb) ↗
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