Scottish Pubs Code: applying for arbitration
Information on how to apply for arbitration under the Scottish Pubs Code.
Part of
Submission of dispute to Adjudicator
The main provision of the Pubs Code allows tenants to request their landlord offer a “Market Rent Only” (MRO) option. An MRO lease sets the rent at an amount agreed upon by the tenant and the landlord, or, if they cannot agree, at a market rate for the property. This type of lease excludes any product or service ties, or compliance with any requirements of the Code and contains no unreasonable terms.
As a result, the adjudicator has the authority to investigate allegations that a pub-owning business has not been making a genuine attempt to conclude an MRO agreement. If found that the POB is not complying with this requirement of the Code the adjudicator could impose a financial penalty.
A dispute can be submitted to arbitration by either a tied-pub tenant (TPT) or a pub-owning business (POB). The Adjudicator must act as the arbitrator, or appoint another person to do so, if the dispute is:
- between a tied-pub tenant and a pub-owning business;
- about whether the business has complied with a term of the Code, other than an excluded term; and
- submitted to the Adjudicator for arbitration either under section 15 or in accordance with an agreement between the parties to the dispute.
A dispute may be referred to arbitration only if the tenant has first notified the pub-owning business that they consider there has been a failure to comply with the Code and; the dispute is submitted within the period of 4 months beginning with the day falling 21 days after the business was notified.
That notification must be given by the tenant to the pub-owning business within 6 months of the date upon which the alleged failure to comply with the Code occurred. This 6 month period can begin on:
- the day on which the alleged failure to comply with the code occurred; or
- where the alleged failure was a continuing one, the day on which the failure ceased; or
- the day on which the tenant became, or could reasonably be expected to have become, aware of the alleged failure, if later than the day mentioned in (a) or (b). The dispute itself must then be submitted to arbitration within a period of four months beginning with the day falling 21 days after the business was notified.
The 21-day period is to allow the parties a reasonable time to try to resolve the dispute without the need for arbitration.
The six-month and four-month limits are designed to ensure that any alleged failures to comply with the Code are addressed promptly. The four and six months periods are always measured in calendar months, so if either period begins on the 29th, 30th or 31st of a month, and there is no corresponding date four or six months later, then the period ends on the last day of that later month (e.g. a four month period would end on 28th February if the period began on 31st October).
The arbitration referral form is linked below.
