ReSolution Issue 22, September 2019 | Page 10

Commercial Landlord and Tenant Disputes:
Three Reasons Why Arbitration is so Popular
by catherine green
During the course of a commercial tenancy, disputes often arise between landlords and tenants in relation to the parties’ obligations under the lease to maintain and repair premises, fixtures and fittings.

The end of a tenancy also often gives rise to disputes between landlord and tenant as to the extent of the tenant’s obligations to ‘make good’ or ‘reinstate’ the premises to the same condition as they were in at the commencement of the lease, the repair and/or maintenance of the landlord’s fixtures and fittings which the tenant was responsible to undertake, and claims by landlords for unpaid rent and outgoings.
These disputes may be resolved by direct negotiation, but all too often the dispute will escalate with the parties taking irreconcilable positions and unable to move forward without engaging in a formal determinative dispute resolution process.
The New Zealand Dispute Resolution Centre (NZDRC) is often approached in such circumstances to provide private dispute resolution services and invariably the initial enquiry will start with the same question: which process is best?

There is of course no one right answer and NZDRC routinely provides mediation, arbitration and expert determination services to parties for the resolution of such disputes. However, our overall experience indicates that arbitration clearly comes out on top as the process of choice for resolving landlord tenant disputes for three primary reasons: cost and time efficiencies (proportionality), choice of decision maker, and finality and enforceability
Keeping the process proportionate
It is not unheard of to hear complaints of arbitration simply mirroring high court litigation with the additional cost of a private judge. However, and in NZDRC’s view, the objective of arbitration must be to provide a flexible and efficient means of resolving disputes quickly, cost effectively, privately and confidentially without necessarily adhering to the formalised, technical procedures of litigation.
Arbitration certainly has the potential to provide disputing parties with a credible, effective and proportionate process to resolve their dispute if approached sensibly. The success of the process is largely dependent on the arbitration procedures adopted by the parties and the extent to which the arbitral tribunal is able to control the process.
It is with this approach in mind that NZDRC developed a suite of Arbitration Rules that are robust and certain, yet innovative in their commonsense approach to the arbitration process. Published in 2018, NZDRC’s latest suite of arbitration rules provide parties with a fair, prompt and cost effective process for the determination of their dispute. The new rules provide for three expedited processes starting with a 45 working day process where the dispute is dealt with entirely on the documents, then moving to 60 or 90 working day processes which are predicated on a hearing of up to three and five days respectively.
Given the relatively limited scope of disputes arising out of lease related obligations, parties commonly adopt either the 45 or 60 day process dependent on their desire to have a hearing (or