1.0 INTRODUCTION

1.1 These are the Rent Review Arbitration Rules for Commercial Leases (rules) of the New Zealand Dispute Resolution Centre Limited (NZDRC).

1.2 These rules are solely for rent review disputes under commercial leases where the dispute:

• (a) Is about the amount of rent and outgoings payable under the rent review provisions of a commercial lease; and
• (b) Has not previously been the subject of an agreement or arbitral award between the parties.

1.3 NZDRC owns the copyright to these rules. They may only be used for an arbitration (actual or intended) administered by NZDRC.

1.4 NZDRC’s functions under these rules will be performed by its registrar (the registrar). All communications to NZDRC must be addressed to the registrar and all communications with the arbitrator must be copied to the registrar.

2.0 THE NATURE OF THE DISPUTE

2.1 The issue in dispute to be decided by the arbitrator is limited to determining the amount of rent and outgoings payable under the rent review provisions of a commercial lease.

3.0 INITIATING ARBITRATION

Agreement and Claim

3.1 To commence arbitration under these rules:

• (a) The parties must complete an arbitration agreement (the arbitration agreement) using the form on the NZDRC website;
• (b) The parties must pay NZDRC’s fixed fee for the arbitration (the fee) equally (unless they agree to pay in different proportions); and
• (c) The initiating party (the claimant) must submit a valid claim (claim) using the claim form on the NZDRC website.

3.2 The claim must include:

• (a) The party and other details required in the claim form;
• (b) The nature and basis of the claim;
• (c) The relief or remedy sought;
• (d) Copies of any expert reports or valuations relied on by the claimant;
• (e) Copies of the lease, all relevant variations, documentation of prior rent review outcomes, and any other documents relied on by the claimant; and
• (f) Submissions on the factual and legal issues involved in the claim, limited to 10 A4 pages (in Arial 10.5 point font or equivalent size) and the claimant’s contentions as to those issues.

3.3 The registrar must copy the claim to the other party (the respondent), using their best endeavours to do so within one working day of receipt of a valid claim.

Selection and appointment of arbitrator

3.4 After receiving a valid claim and full payment of the fee, NZDRC will appoint a sole arbitrator and serve a notice of appointment on the parties, using its best endeavours to do so within three working days.

3.5 Each party must provide any information that NZDRC requests for the selection and appointment of the arbitrator. NZDRC will consider but is not bound by that information.

3.6 NZDRC will make the appointment as it sees fit. Under these rules, only NZDRC is empowered to appoint an arbitrator.

3.7 NZDRC will copy the claim to the arbitrator, using its best endeavours to do so within one working day after serving the notice of appointment on the parties. (NZDRC may provide a copy of the claim to the arbitrator once the arbitrator has accepted the appointment and before serving notice of appointment on the parties.)

Revocation of appointment of arbitrator

3.8 NZDRC may revoke an arbitrator’s appointment and appoint a replacement arbitrator on its initiative or a written challenge by any party if:

• (a) The arbitrator resigns (by notice to NZDRC, which NZDRC will copy to the parties);
• (b) The parties agree to revoke the arbitrator’s appointment;
• (c) Circumstances exist that, in NZDRC’s opinion, give rise to justifiable doubts as to the arbitrator’s impartiality or independence; or
• (d) The arbitrator becomes, in fact, or in law, unable or unwilling to perform that office or fails to act within the time limits prescribed in these rules.

3.9 NZDRC’s decision to revoke an arbitrator’s appointment is an administrative decision that is final and binding on the parties and the arbitrator. It is not subject to appeal, and NZDRC is not required to state or communicate reasons for its decision.

4.0 PROCEDURAL MATTERS

4.1 Where these rules conflict with a mandatory provision of the Arbitration Act 1996 (the Act), that mandatory provision will prevail.

4.2 Where these rules conflict with an optional provision of the Act, these rules will prevail and constitute an agreement not to be bound by the optional provision.

4.3 The Act applies to the arbitration agreement and the arbitration, including the First and Second Schedules of the Act, except to the extent that these rules, the arbitration agreement, or further written agreement of the parties modify optional provisions of the Act.

4.4 No party may apply to the High Court under clause 4 of the Second Schedule of the Act to determine any preliminary question of law.

4.5 No party may appeal to the High Court under clause 5 of the Second Schedule of the Act on any question of law arising out of an award without the consent of every other party given after the making of that award or without the leave of the High Court.

4.6 No party may apply to the High Court under clause 6(3) of the Second Schedule of the Act to vary the amount or the allocation of the fees and expenses arising out of or in connection with any award.

Periods of time

4.7 All periods of time for the purposes of arbitration under these rules will commence from the date NZDRC serves a notice of appointment on the parties (commencement date).

4.8 Unless otherwise specified, a working day means the 24-hour period of any day of the week that ends at 11.59 pm on that day, other than:

• (a) A Saturday, a Sunday, Waitangi Day, Good Friday, Easter Monday, Anzac Day, the Sovereign’s Birthday, Matariki, and Labour Day;
• (b) A day in the period commencing on 24 December in any year and ending at the close of 5 January in the following year;
• (c) A day that is an official holiday or non-business day at the usual place of residence or business of the arbitrator or a relevant Party; and
• (d) If Waitangi Day, Anzac Day or Matariki falls on a Saturday or a Sunday, the following Monday is the day.

4.9 Any period referred to in these rules begins on the first day after the date when any notice, communication, submission, or proposal is received or upon which an action is to be undertaken by a party or the arbitrator.

4.10 If the last day for service of any notice, communication or proposal, or an action to be undertaken by a party or the arbitrator is not a working day at the address for service of the addressee or the place at which the action is to be undertaken, the period is extended until the next working day.

Service – electronic communication

4.11 All communications (including any notices, applications, requests, or submissions that need to be given or served under these rules) must be in writing.

4.12 Electronic communication is the preferred method of communication. Electronic communication means email or any other electronic means of communication that provides a record of its transmission, receipt or delivery. It includes the use of any designated electronic case management system operated by NZDRC.

4.13 A communication can be given or served by electronic communication. This Rule applies whether or not any contract relevant to the dispute allows electronic communication.

4.14 A party can nominate an email address or other means of electronic communication as their preferred method of communication. The nomination must be notified to NZDRC, the arbitrator, and every other party (for example, by including it in the arbitration agreement).

4.15 If a nominated email address or other means of electronic communication is notified, any communication may be given or served in that manner, and any communication delivered or served in that manner will be considered as having been received by the party.

4.16 If there is no nominated email address or other means of electronic communication, but electronic communication has been used regularly in the parties’ previous dealings, any communication may be given or served in that manner.

4.17 In the absence of any proof to the contrary, an electronic communication is considered to be given or served on the day it is transmitted and is considered to be received on the same day.

Other forms of communication

4.18 A communication can also be given or served in the following ways:

• (a) By physically delivering it to the addressee;
• (b) By delivering it to the place of business, usual residence or usual mailing address of the addressee; or
• (c) If, after reasonable efforts to give delivery in another manner, it is sent to the addressee’s last known place of business, usual residence or mailing address, by registered letter or any other means that provides a record of the attempt to deliver it.

4.19 In the absence of proof to the contrary, a communication given or served under rule 4.18 is considered to be given or served on the day it is delivered and is considered to be received on the same day.

5.0 RESPONSE

5.1 A respondent may serve a written statement in response to the claim (response) on the arbitrator and every other party.

5.2 The response must include:

• (a) What matters in the claim are accepted or agreed;
• (b) What matters are disputed, with reasons;
• (c) Copies of any expert reports or valuations relied on by the respondent;
• (d) Copies of all other documents relied on by the respondent (other than those provided by the claimant); and
• (e) Submissions on the factual and legal issues involved in the claim and the response, limited to 10 A4 pages (in Arial 10.5 point font or equivalent size), and the respondent’s contentions as to those issues.

5.3 The response must be served on the arbitrator and every other party on or before the tenth working day after the commencement date (the response period). In making an award, the arbitrator must disregard any response served after the end of the response period.

6.0 REPLY AND REJOINDER

6.1 The claimant may serve a written statement in reply to the response (reply) on the arbitrator and every other party.

6.2 The reply must be strictly in reply to the response and cannot raise any new issues. The reply may include supporting documents.

6.3 The claimant’s reply must be served on the arbitrator and every other party on or before the fifteenth working day after the commencement date (the reply period).

6.4 A respondent who receives a claimant’s reply may serve on the arbitrator and every other party a written statement in answer to the reply (rejoinder).

6.5 The rejoinder must be strictly in response to the reply and cannot raise any new issues. The rejoinder may include supporting documents.

6.6 The rejoinder must be served on the arbitrator and every other party on or before the eighteenth working day after the commencement date (the rejoinder period).

6.7 An arbitrator may refuse to consider any new material or issues raised in a reply or a rejoinder.

7.0 PROCEDURE

7.1 The arbitrator has the widest discretion permitted by law to resolve the dispute in a just, speedy, cost-effective, and final manner under these rules and the principles of natural justice.

7.2 The parties expressly acknowledge and accept that what is necessary to satisfy the requirements of natural justice in arbitration under these rules, given the fixed time limits set, may, by necessity, differ from what might constitute natural justice in other settings.

No joinder or consolidation

7.3 There is no provision for joinder or consolidation under these rules.

No hearing

7.4 Under these rules, oral hearings are not permitted. Arbitration under these rules determines the matters in dispute on the documents only (‘on the papers’).

7.5 Despite rule 7.4, at their sole discretion, the arbitrator may:

• (a) Convene a conference of the parties to determine any application for directions or relief under these rules or to clarify any aspects of:
  • (i) the matters in dispute;
  • (ii) the parties’ submissions; or
  • (iii) any evidence submitted to the arbitrator; or
• (b) Convene a conference of the parties’ valuers (acting as experts) or any other experts,

in each case by virtual meeting.

Evidence and admissibility

7.6 Each party will bear the burden of proving the facts relied upon to support its claim (including any reply) or response (including any rejoinder).

7.7 The arbitrator will determine the outcome based on the written submissions, evidence, and any other material provided to every other party and the arbitrator under these rules.

7.8 The arbitrator may request further relevant submissions, information, or evidence from a party at any time but must give every other party a reasonable opportunity to comment on the further submissions, information, or evidence.

7.9 The arbitrator will determine the admissibility, relevance, weight, and materiality of any evidence offered by the parties. The arbitrator is not bound by any rules of evidence that might apply in a court of law.

Default of a party

7.10 The arbitrator may extend any period for serving a response, reply, or rejoinder by any period the arbitrator considers appropriate if the arbitrator considers additional time is reasonably required (for example, due to the size or complexity of the claim and the respondent has insufficient time to prepare a response as a result). An extension can be made at the request of any party or on the arbitrator’s own initiative. However, a request must be made before the expiry of the relevant period, and the arbitrator must disregard any late request.

7.11 The arbitrator must disregard any response, reply or rejoinder served after the end of the period specified under these rules or as extended by the arbitrator.

7.12 If a party does not comply with these rules or the arbitrator’s directions, the arbitrator must continue the proceedings and make an award on the information and evidence before them.

7.13 The arbitrator may order the discontinuance of the arbitration if they consider that the parties have abandoned the arbitration, withdrawn the claim, or settled the dispute, after giving the parties five working days’ notice of the arbitrator’s intention to do so.

Waiver of right to object

7.14 A party to the arbitration that continues with the arbitration without promptly raising:

• (a) A plea as to jurisdiction;
• (b) An objection as to any direction or order of the arbitrator;
• (c) Any objection as to failure to comply with these rules; or
• (d) Any other irregularity affecting the arbitrator or the conduct of the arbitration,

will be deemed to have waived its right to object later, unless that party establishes that at the relevant time it did not know, and could not, with reasonable diligence, have discovered the grounds for objection.

8.0 AWARD

8.1 The arbitrator must make one or more awards as required for the final determination of the dispute as soon as practicable after considering all submissions and evidence received within the periods fixed under these rules or extended by the arbitrator.

8.2 The arbitrator will use their best endeavours to make a final award that determines the matters in dispute within 35 working days of the commencement date.

Scrutiny of award by NZDRC

8.3 Before signing an award, the arbitrator shall submit the award in draft form to NZDRC for scrutiny.

8.4 NZDRC may make recommendations as to the form of the award directed to identifying any errors in computation, any clerical or typographical errors, or any errors of a similar nature in the award. NZDRC may draw the arbitrator’s attention to any points of substance or any internal inconsistencies in the award without affecting the arbitrator’s independence and autonomy in rendering the award.

8.5 The arbitrator may not issue an award until it has been approved by the registrar as to form.

Provision of award

8.6 A copy of the signed award will be given to the parties as soon as possible after signature.

Settlement or other grounds for termination

8.7 The parties are encouraged to resolve the dispute themselves. If the parties settle their dispute before an award that finally determines all the substantive matters in dispute is made, the arbitrator must terminate the arbitration.

8.8 The arbitrator may, at their sole discretion, record the terms of the settlement and issue a final award on agreed terms if requested by the parties. The arbitrator is not obliged to give reasons for such an award.

8.9 No amount of the fee shall be refunded to the parties if the dispute is settled before an award is made.

Correction and interpretation of award

8.10 Within three working days of receipt of an award, a party may, with notice to every other party, request the arbitrator to:

• (a) Correct any errors in computation, any clerical or typographical errors, or any errors of a similar nature; and/or
• (b) Give an interpretation of a specific dispositive point or part of the award that is improperly expressed or ambiguous on its face, to allow the award’s execution by the parties.

8.11 If the arbitrator considers the request justified, they must use their best endeavours to amend the award within two working days of receipt of the request.

8.12 The arbitrator may correct any errors in computation, any clerical or typographical errors, or any errors of a similar nature, on their own initiative within three working days of the date of the award.

8.13 The arbitrator must not charge any additional fees for correction or interpretation of an award.

9.0 COSTS OF ARBITRATION

Fee

9.1 The arbitrator’s fees and expenses (the fee) will be the amount set out on the NZDRC website when the claim is submitted to NZDRC under rule 3.1(c).

9.2 The fee must be paid by the parties under rule 3.1(b) before the commencement of the arbitration.

Party’s own costs and expenses

9.3 Each party must bear their own costs and expenses related to the arbitration (for example, legal or expert fees).

10.0 EXCLUSION OF LIABILITY AND INDEMNITY

10.1 The purpose of this rule is to give the arbitrator and NZDRC (including its agents and employees) the widest immunity from liability that the law will allow. Any reference to NZDRC in these clauses includes a reference to the agents and employees of NZDRC (including the registrar).

10.2 The arbitrator and NZDRC are not liable for any act done or not done in relation to the arbitration or these rules. The parties release the arbitrator and NZDRC from all liability of any kind (including negligence, misrepresentation, breach of contract or breach of duty of any kind (including statutory, fiduciary or equitable)). This release does not apply to the extent that the arbitrator or NZDRC has acted fraudulently.

10.3 If a claim is brought against the arbitrator or NZDRC despite rule 10.2, the parties (jointly and severally) indemnify the arbitrator and NZDRC in respect of that claim.

10.4 Words of the arbitrator or NZDRC (for example, written statements or oral comments) cannot be used in any action for defamation, libel, slander or any similar complaint.

11.0 MISCELLANEOUS

11.1 These rules may be amended from time to time by NZDRC.

11.2 An arbitration will be conducted in accordance with the rules in effect at the time the claim is submitted to NZDRC under rule 3.1(c).

11.3 The registrar may issue practice notes to supplement, regulate and implement these rules and facilitate the administration of arbitrations governed by them. Those practice notes form part of these rules to the extent that they do not amend any of these rules.

11.4 All decisions of NZDRC regarding its duties, functions and obligations under these rules are:

• (a) final and binding on the parties and the arbitrator;
• (b) of an administrative nature;
• (c) not subject to review or appeal to NZDRC; and

NZDRC is not required to give reasons for any such decisions.

11.5 By agreeing to arbitration under these rules, the parties and the arbitrator are deemed to have agreed not to apply to any court, judicial authority or any other body having jurisdiction for any relief regarding NZDRC’s jurisdiction or authority under these rules so far as that agreement is not inconsistent with the law.

11.6 NZDRC, the parties and the arbitrator must act in the spirit of these rules in all matters not expressly provided for in them and make every effort to ensure that an award made under these rules is enforceable.

11.7 Unless a party requests the return of any original documents provided to the arbitrator, all original documents may be destroyed by the arbitrator three calendar months following the date of the last award made by the arbitrator concerning the dispute.