In the first mandatory arbitration award in England & Wales under the Commercial Rent (Coronavirus) Act 2022 (CRCA), the tenant has failed to obtain relief from £450,000 of rent arrears.
The tenant, H Samuel and Ernest Jones jewellers sought relief in respect of its registered office at Imperial Place, Elstree Way, Borehamwood, Hertfordshire, saying that its offices were affected by Covid-19 closure requirements in addition to its 300 retail stores.
It is a requirement under the CRCA that relief may be sought in circumstances where the business had been subject to a mandatory closure order under the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020.
The jewellers argued that the business actually being carried on at the premises was, in essence, an ancillary part of the same business, with the office use merely supporting the applicant’s retail business and therefore, it should fall within the scope of the CRCA.
The arbitrator did not agree, saying that the registered office was not offering goods for sale in a shop and the premises did not comprise or include a shop subject to the mandatory closure orders.
This will be a welcome judgment for commercial landlords, affirming a strict interpretation of the mandatory closure order requirements under the CRCA.
If you have concerns or questions about commercial rent arrears, mandatory arbitration under the CRCA or how this decision may impact you or your business, please do not hesitate to get in touch with our Real Estate Disputes team or your usual Brodies' contact.