The St Albans branch of toy retailer The Entertainer has been denied a reduction in rent or more time to pay following an arbitration.
The retailer took its case to the independent arbitration panel empowered by the government to reduce or uphold commercial rent arrears generated during the Covid-19 pandemic.
In written argument, the company’s head of legal said that during the Covid lockdowns (the so-called “protected period”) the company had paid 50% of the rent due on the premises, and asked for the arbitrator to rule on rent arrears of around £32,500.
In a detailed decision, Falcon Chambers arbitrator Elizabeth Fitzgerald refused to either reduce the debt or give the company more time to pay.
“There is a superficial attractiveness to the applicant’s submissions,” she wrote in her decision.
“It is clear that the applicant, like many retailers, has been hard hit by the pandemic and the consequential measures introduced by the government. It has paid 50% of the full rent that fell due during the protected period and, throughout the pandemic, was active in taking steps to preserve its business.”
She said that the company had reached an agreement with other landlords, but not the landlord of the St Albans shop.
“I can appreciate its frustration in not being able to reach an agreement with the respondent as it has with many of its other landlords,” she said. “But the question for me in this arbitration is not whether the respondent has acted fairly or reasonably, or whether it would be equitable and fair if the respondent were required to share the burden of the losses that the Covid lockdowns have caused.”
She said she was required to look into the shop’s financial position and the company’s performance.
“I am entitled to have regard to the applicant’s financial position as a whole, and not just the financial health of the ‘single shop’ run from the subject premises,” she said.
The company’s most recent report and accounts shows that the business has adapted well, she said. She quoted statements from the company that, throughout the pandemic, the toy market “has remained resilient”.
“I accept the respondent’s submission that the evidence provided does not support a conclusion that the applicant is unable to meet its contractual liabilities,” she said. “The applicant should be required to pay the debt in full.”
The Entertainer (Amersham) Ltd v British Overseas Bank Nominees Ltd and WGTC Nominees Ltd
In the matter of an arbitration under the Commercial Rent (Coronavirus) Act 2022
Falcon Chambers Arbitration, 19 December 2022
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