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Lawbite: When Final means final!

  • United Kingdom
  • Litigation and dispute management
  • Real estate litigation

11-02-2019

Cine-UK Limited v Union Square Developments Ltd [2019] CSOH 3

A landlord and tenant couldn’t agree revised rent due in terms of a rent review. An expert surveyor was appointed to determine the issue in accordance with the provisions of the lease. The tenant assessed the rent at £563,750, the landlord at £834,000 and the expert set it at £755,375.

The lease stated the expert’s determination was to be “final and binding … on fact and law”. However, the tenant tried to challenge the expert’s findings, arguing she erred in law.

The landlord’s primary argument was the action was incompetent because parties had agreed the surveyor’s decision was to be final and binding both on the facts and the law. The tenant argued that the expert did not have a “free hand” on any issue and said she had answered the wrong question, so her decision was open to challenge..

The Court “had no hesitation” in agreeing the expert’s decision was final, conclusive and not subject to review. The lease did not require her to give reasons for the decision – which was consistent with no right of appeal; reasons are relevant in assessing whether there is a challenge. The lease also didn’t limit the types of disputes which could be referred to the expert; indicating all disputes remitted to the expert were to be final both on fact and law.

Key points

  • experts are often appointed to decide disputed rent reviews and it is generally accepted that expert determination provides a relatively quick solution which provides certainty and finality to both sides
  • agreeing that the expert’s decision is final on all issues removes the potential for an appeal unless, e.g. the expert hasn’t done what was asked of her. This includes any question of law that may arise
  • when drafting rent review provisions parties should consider whether to include express provision for the expert to provide reasons for their decision
  • disputes can be resolved in a number of ways and many commercial contracts will include dispute resolution clauses involving one or more methods of dispute resolution. Care should be taken to choose the method most likely to suit the parties’ needs

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