Decision

Award Summary - July 2023 - 1

Published 10 October 2023

Applies to England and Wales

Publisher’s Note: The Pubs Code Adjudicator encourages openness and transparency in the operation of the Pubs Code etc. Regulations 2016. Publication of awards made in Pubs Code arbitrations, or summaries of those awards, enables the industry to better understand previous decisions and consider how the Pubs Code is being applied in individual cases. Neither the Pubs Code Adjudicator nor an arbitrator is bound to follow published awards in applying the law, but such awards can be used to support the industry’s consideration of the proper interpretation of the Pubs Code. Parties are encouraged to take independent professional advice about their situation.

The outcome of an arbitration is based on its own facts and the evidence produced in the case and is not binding in other cases where the landlord and tenant are not the same. The Pubs Code Adjudicator does expect a regulated pub-owning business to consider its understanding of the law in light of each award that makes a finding on the interpretation of the statutory framework and to adjust its behaviour towards tenants as appropriate. The publication of an arbitration award or an award summary does not mean the Pubs Code Adjudicator endorses the decision and it does not form legal advice about any issue.

This summary is provided to assist in understanding the arbitration decision. It does not form part of the decision or reasons for the decision.

1. Summary of findings

The tied pub tenant (the TPT) referred a dispute to arbitration in April 2023 in relation to alleged Pubs Code breaches by the pub-owning business (the POB) during a tenancy at will that ended on 21 September 2021. In a preliminary award, the Arbitrator found in favour of the POB that the TPT’s referral was out of time in accordance with section 49(4) of the Small Business, Enterprise and Employment Act 2015 (the SBEEA).

2. Factual background

The dispute between the TPT and POB related to a Tenancy at Will in place between 21 April 2020 and 21 September 2021.

On 1 March 2023, the TPT served a letter on the POB outlining several alleged breaches of the Pubs Code and gave the POB 21-days’ notice of its intention to refer the dispute to arbitration as required by section 49(2) of the SBEEA. The PCA received the TPT’s arbitration referral on 20 April 2023. The POB said the TPT’s referral was out of time in accordance with section 49(4) of the SBEEA, which states that a dispute may not be referred to arbitration after the expiry of 4 months beginning with the first date on which the dispute could have been referred.

3. Issues

The Arbitrator considered whether they had jurisdiction to determine the alleged breaches of the Pubs Code in a preliminary award.

4. The relevant legislation

S49(2) of SBEEA 2015 provides that “except in the case mentioned in subsection (3), the dispute may not be referred until after the expiry of the period of 21 days beginning with the date on which the tenant notifies the pub-owning business of the alleged non-compliance.”

S49(4) of SBEEA 2015 provides that “In all cases, a dispute may not be referred after the expiry of the period of 4 months beginning with the first date on which the dispute could have been referred”.

Arbitrator’s Findings

The Arbitrator referred to the “PCA Advice Note: Timing of referral for arbitration by tied pub tenants (non-MRO disputes)” as updated on 8 June 2023. In particular, they referenced the advice relating to a TPT being required to make a referral to the PCA within the compound period of four months and 21 days of a dispute arising in accordance with sections 49(2) and 49(4) of SBEEA.

The Arbitrator also referred to the PCA Notice, “Declaration by Pub-Owning Businesses on Preserving Tied Pub Tenants’ Pubs Code Rights During the Covid-19 Emergency (January 2021)” published on 12 January 2021. This documented the agreement made by all six regulated POBs during the Covid-19 pandemic that certain TPTs’ rights under the Pubs Code and SBEEA would be preserved for a period of time defined under the declaration as the ‘emergency period’. For the purposes of calculating the 4-month period in section 49(4) of the SBEEA, this meant time would not run during the Covid-19 emergency period, which came to an end on 31 March 2021.

Given that the TPT’s right to refer this dispute to arbitration arose during the Covid-19 emergency period, the Arbitrator considered that the 4-month time limit under section 49(4) of the SBEEA did not start to run until after that declaration had expired on 31 March 2021.

The Arbitrator therefore found that the last day on which the TPT could have referred the dispute to arbitration was 31 July 2021, and that as the referral was not made until 20 April 2023 it was out of time.

Decision

In view of the Arbitrator’s findings that the referral was out of time, the Arbitrator decided that they did not have jurisdiction to determine the alleged breaches.