By Jesika Sabo and Maria Cole, NZDRC
Do both parties need to agree to participate?
Yes, parties who wish to access the scheme must agree to do so, whether they wish to arbitrate or mediate, even if they already have an agreement to arbitrate or mediate in the lease document. This is because they need to agree to enter into a process delivered specifically in accordance with the scheme. You can download a template agreement to mediate or arbitrate on our website by clicking here.
What if the other party does not agree?
If the other party does not agree to use the subsidised scheme you may want to seek independent legal advice to see what your options may be. You may have a dispute resolution clause in your lease that gives you a contractual right to arbitrate or mediate.
Does my dispute qualify?
Parties to a dispute will be eligible to access the subsidised scheme if:
- the dispute is a Qualifying Dispute;
- at least one of the parties to the Qualifying Dispute meets the Eligibility Criteria; and
- the applicants have not previously accessed mediation or arbitration services (whether with NZDRC or another provider contracted to the Ministry of Justice) in respect of the Qualifying Dispute in question.
Parties can only access fully subsidised mediation or arbitration. Accordingly, to the extent parties choose to mediate, this means they will be unable to access a subsidised arbitration service in the event of failure to settle at the mediation. However, they may still access NZDRC’s private low cost and fixed fee arbitration scheme if the other party agrees.
A dispute is a Qualifying Dispute if:
- the dispute is about the payment of rent and outgoings where the lessee to the lease has experienced a material loss of revenue during a lockdown period because of government restrictions put in place to combat COVID-19; and
- the payment of rent and outgoings during the relevant lockdown period has not previously been the subject of an agreement or arbitral award between the parties to the dispute.
The party Eligibility Criteria requirements for the subsidy are:
- the business is New Zealand based; and
- the business has 20 or fewer full-time equivalent staff:
- in the case of the lessee, per lease site; or
- in the case of the lessor, in total.
What is a full-time equivalent employee?
The Ministry of Justice defines this as:
A full-time equivalent employee must work 30 hours or more.
- One full time employee is equal to two part-time employees.
- A part-time employee works less than 30 hours per week. If an employee works variable hours, calculate the average hours worked each week over the last 12 months, or if less than 12 months, the average hours worked since employment began.
When does the subsidy expire?
The commercial lease arbitration and mediation scheme will be open to new applications until 31 March 2021. New participants will not be able to apply for the scheme after this date.
What if I do not qualify?
NZDRC offers non-eligible parties a low cost and fixed fee arbitration or mediation service for rent relief disputes under the special COVID-19 service launched by NZDRC at the start of New Zealand’s first COVID-19 lockdown.
For any parties who do not meet the eligibility requirements, parties may still mediate or arbitrate their rent relief dispute (by agreement) but will need to meet the cost of doing that.
NZDRC also provides comprehensive commercial arbitration and mediation services for parties to commercial lease disputes including, for example: disputes over rent renewals, reinstatement of premises, and repair, replacement and maintenance of the property, premises, fixtures, and fittings.