Martin Dray acted for the applicant in a successful claim for relief from payment under the Commercial Rent (Coronavirus) Act 2022
Martin Dray acted for the successful applicant in London Clubs Nottingham Ltd v UKRO Property Holdings I Limited, an arbitration decided under CRCA 2022, obtaining one of the largest write-offs of protected rent debt (both in financial and also percentage terms) to date awarded under the statute.
The Applicant has a lease of premises in Nottingham from which it operates the Alea casino. The business was stopped in its tracks by the Coronavirus lockdown regulations. The premises were closed; the Applicant could not trade. The financials went from £700k typical average annual EBITDA pre-pandemic to a £2.4 million loss during 2020 and 2021. The business racked up substantial commercial rent arrears.
Against this backdrop the Applicant tenant sought relief from payment in respect of some £575k+ protected rent debt (including interest) for the period from March 2020 to July 2021. The Applicant sought full relief, i.e. that the debt be entirely written off. Conversely, the Respondent landlord demanded full payment and offered only a very limited deferment (up to around 6 months).
The arbitrator decided that the pandemic had had an immediate and significant impact on the Applicant’s business but that the business remains viable. Moreover, after a detailed review of the Applicant’s financial performance and projections, the arbitrator determined that the Applicant should pay just c.£209k of the debt by instalments spread over almost 2 years and that it should be relieved from paying any other part of the protected rent debt.
The outcome:
More than 60% of the rent arrears (and interest) were written off; and
The Applicant can pay the remainder by instalments down to the end of 2024, with the timing of the payments linked to the forecast positive EBITDA for its business.
The decision gives the Applicant a welcome chance to re-establish itself and to survive after the pandemic, in line with the guiding philosophy of the 2022 Act.
The arbitrator has ruled. As Caesar might have said alea iacta est (the die is cast) – which seems entirely appropriate for the Alea casino.
The arbitrator’s award is available below -
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