Rent Review Arbitration Case Study: Impartiality and Award Advice

This case study analyzes a rent review arbitration where an arbitrator was appointed to determine a fair market rent. During a property inspection, the caretaker made a comment about the building's foundation being weak, based on a civil engineer's report. The analysis focuses on whether this comment constitutes undue influence on the arbitrator, violating the principles of impartiality under the Arbitration (Scotland) Act 2010. It discusses the arbitrator's duty to collect evidence impartially and the implications of external advice on the arbitration award. Furthermore, it explores what advice should have been given if permissible, suggesting an award favoring the tenants due to the building's condition and the unfair rent increase. The study concludes that the arbitrator must adhere to the Arbitration Act and Code, ensuring a fair resolution.

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International Arbitration
Name of Student-
Name of University-
Author note-

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Table of Contents
Situation analysis.............................................................................................................................4
Answer (a).......................................................................................................................................4
Answer (b).......................................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Situation analysis
The given situation is regarding a rent review arbitration case. In this case, both the
parties agreed to appoint an arbitrator for fixing a fair market rent. For such purpose, the
arbitrator decided to inspect the property alone, which was agreed upon by both parties. The
arbitrator, therefore, for inspection, visited the building, where he was escorted by the caretaker.
While inspecting, the caretaker commented that previously a civil engineer inspected the
building and stated that the foundations were dangerous and he was preparing a report on that for
the landlord. The arbitrator did not respond to this comment and he went back to office after
inspection.
Answer (a)
In arbitration, an arbitrator is appointed by the parties, by virtue of an arbitration clause
for resolving any issues between the parties. An arbitrator, after determining the issue, gives an
award, which is legally binding, against which no appeal is permissible in court. Under the
Arbitration (Scotland) Act, 2010, there are certain founding principles of arbitration, one of
which states that in arbitration, a dispute must be resolved fairly, impartially and without any
unnecessary delay or expense1. According to the Act, the arbitrator’s work is to collect
evidences from the claimant and the respondent both and decide the case accordingly2. In
consumer cases, the arbitrator can even visit places for inspecting goods and services or visit
properties for the same purpose. Moreover, the functions, duties and powers of an arbitrator must
1 Merkin, Robert, and Louis Flannery. Arbitration Act 1996. CRC Press, 2014.

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be in accordance with the Arbitration code, 20103. The code states the way of conduct for an
arbitrator and it is imperative for an arbitrator to abide by the code. In the given case, while the
arbitrator was inspecting the property, the care taker commented that the building’s foundation
was weak and dangerous, as stated by a civil engineer and a report was being prepared for the
landlord regarding this. Such comment was a kind of advice to the arbitrator in relation to his
inspection4. As mentioned earlier, both the Arbitration Act and Code of 2010, states that an
arbitrator must be impartial while judging a dispute, he must not be influenced or take any
advice from anyone before the end of the arbitral proceedings5. Taking the advice of another
person or making a decision by being influenced from someone’s comment is considered as bias.
This is why the arbitrator did not respond to the caretaker’s comment and it is not permissible to
advice an arbitrator regarding a matter before the end of arbitral proceedings.
Answer (b)
In the given case, if it was permissible to advice the arbitrator before the end of the
arbitral proceedings, the advice should have been to give the arbitration award to the tenants,
who claimed that the 10 percent increase of rent of the 7th floor building at 56 Chiltern Street,
Aberdeen, by the landlord was unfair, as such increase of rent was not in accordance with the
2 Dundas, Hew R. "The Arbitration (Scotland) Act 2010: A Great Collaborative Success and an Innovative Model
for Other Jurisdictions to Follow." Indian J. Arb. L. 5 (2016): 81.
3 Born, Gary B. International arbitration: cases and materials. Wolters Kluwer Law & Business, 2015.
4 Masters, Lance A., and K. Michael Clarke. "Consumer Arbitration: The BBB Approach." Proceedings of the 1988
International Conference of Services Marketing. Springer, Cham, 2015.
5 Kirby, Jennifer. "Efficiency in International Arbitration: Whose Duty Is It?." Journal of International
Arbitration 32.6 (2015): 689-695.

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market rent. Moreover, the award of arbitration must be given to the tenants, as it was evident
from the comment of the caretaker that a civil engineer, after surveying the building, stated that
the foundations were weak and dangerous and he was also preparing a report for the landlord
regarding the building as well. Moreover, the engineers seemed worried as well. It is evident that
building was a weak one and the 10 percent increase of the rent was not a fair one by the
landlord, where he knew about the condition of the weak condition of the building and
knowingly increased the rent for meeting the expenses for repairing the building. Therefore, it
would be the only proper advice for the arbitrator to give an award in favor of the tenants and
decrease the rent, fixing it at the proper rate, which should be in accordance with the present
condition of the building. For the purpose, the arbitrator must also take statements from the
particular civil engineer and the caretaker and also take into consideration the reports prepared
by the civil engineer, regarding the property. All these must be used as evidence by the arbitrator
and based on these evidences he must provide the award6. While doing so, he must also abide by
the founding principles under the Arbitration Act, 2010 and also the code of conduct, as laid
down under the Arbitration Code, 2010.
Conclusion
Therefore, it can be concluded by stating that in the given case of rent review arbitration
case, the provisions of the Arbitration Act, 2010 and Arbitration Code, 2010 will apply and the
arbitrator must abide by the provisions and rules of the Act and the code and must resolve the
matter accordingly.
6 Babic, Davor, and Zrinka Mustafa. "Challenge of Arbitrators under the 2011 Zagreb Arbitration Rules." Zbornik
PFZ 65 (2015): 213.

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References:
Babic, Davor, and Zrinka Mustafa. "Challenge of Arbitrators under the 2011 Zagreb Arbitration
Rules." Zbornik PFZ 65 (2015): 213.
Born, Gary B. International arbitration: cases and materials. Wolters Kluwer Law & Business,
2015.
Dundas, Hew R. "The Arbitration (Scotland) Act 2010: A Great Collaborative Success and an
Innovative Model for Other Jurisdictions to Follow." Indian J. Arb. L. 5 (2016): 81.
Kirby, Jennifer. "Efficiency in International Arbitration: Whose Duty Is It?." Journal of
International Arbitration 32.6 (2015): 689-695.
Masters, Lance A., and K. Michael Clarke. "Consumer Arbitration: The BBB
Approach." Proceedings of the 1988 International Conference of Services Marketing. Springer,
Cham, 2015.
Merkin, Robert, and Louis Flannery. Arbitration Act 1996. CRC Press, 2014.