Section 29 requires mediation, followed by arbitration, in lieu of litigation, t

Question

Section 29 requires mediation, followed by arbitration, in lieu of litigation, to resolve disputes. What are the advantages and disadvantages of such a provision? How should the mediator and/or arbitrators be selected?

29. Dispute Resolution

Except for any claim relating to Tenant’s default in the payment of rent, Landlord and Tenant agree to submit any and all other claims, controversies, and disputes between Tenant and Landlord arising out of or relating to the Leased Premises, this Lease, or the parties’ performances due hereunder to mediation pursuant to the mediation rules contained in applicable state statutes and rules of civil procedure, prior to demanding arbitration. Landlord and Tenant agree to maintain all communications made at such mediation in the strictest confidence between themselves and their counsel, unless otherwise required to disclose same under applicable law.

If, after sixty (60) days of mediation, the parties fail to reach agreement, the claim, controversy, or dispute shall be resolved by binding arbitration administered by and in accordance with the commercial rules of the American Arbitration Association, and any court of competent jurisdiction shall enter final judgment on any such final award rendered by the arbitrators.

Explanation / Answer

Section 29 requires mediation, followed by arbitration, in lieu of litigation, to resolve disputes. What are the advantages and disadvantages of such a provision? How should the mediator and/or arbitrators be selected?

It is clear that only non payment of rent by tenant is not acceptable. Law is clearly on the landlords side in this case. Other than this if there is any issue between tenant and landlord related to condition of property, deposits paid or any other issues like electricity charge, maintainance can be resolved mediation and if mediation fails within 60 days then by Arbitrator whose decision is binding. Any court with comepetent jurisdictionn can also handle this case.

Advantages:

1.Timely resolution of cases.

2. A clear hierarchy for case redressal.

3. clear identification of disputes like non payment and other issues.

Disadvantages:

1. No clarity about mediator and arbitrator qualification.

2. Arbitrator or competent court authority is subjective and may differ from case to case.

Mediators and arbitrators can be selected with following criteria:

1. A lawyer practicing in a court already.

2. An emminent law expert.

3. A Social activist.

4. A retired court judge.

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