Star Pubs – Award Summary– July 2025 – 1

Summary of Award

1. Summary of findings 

The Arbitrator found that the tied-pub tenant (the TPT) had been unable to establish any breach of the Pubs Code Etc. Regulations 2016 (the Pubs Code). The Arbitrator also found that there is no legal basis for financial compensation or damages to be awarded as a remedy for any such breaches in any event, considering that the arbitral tribunal did not have jurisdiction to hear financial claims relating to alleged breaches of an agreement between the parties. 

2. Factual background 

In 2022, a Temporary Management Agreement (the Agreement) relating to the pub (the Premises) was entered into by the TPT and the pub-owning business (the POB). The Agreement was terminated in 2024 according to its terms, the POB served a Notice to Quit the Premises and commenced proceedings for their recovery. The TPT alleged breaches of the Pubs Code and made a referral to the Pubs Code Adjudicator (the PCA) for arbitration. The PCA appointed an alternative Arbitrator to decide the matter. After recovering possession of the Premises, the POB entered into a new Temporary Management Agreement with another party. Issues

The following issues in the claim were considered by the Arbitrator:

1. Basis for Financial Compensation;
2. POB’s conflict of interest and unreasonable encouragement to the TPT to invest;
3. Unfair charges relating to utilities, and billing failures;
4. Unfair treatment and charges;
5. GDPR breaches and inaccurate information provided to the Court by the POB;
6. Alleged breaches of the TUPE regulations;
7. Unlawful use of intellectual property; and
8. Equipment and maintenance failures.
9. The relevant legislation

Reg 9 of the Pubs Code contains provisions regarding pubs entry training and the obligations on POBs to advise TPT’s of the same.

Reg 10 of the Pubs Code provides an obligation on POBs to ensure TPTs have a sustainable business plan prior to entering into any agreements.

Reg 11 of the Pubs Code relates to the obligation on POBs to provide TPTs with ‘required information’ specified in Schedule 1 of the Pubs Code. 

Reg 12 of the Pubs Codes relates to duties of POBs where a tenant intends to assign a tenancy.

Reg 13 of the Pubs Code relates to premises and the requirement to inspect premises and obtain advice of a qualified surveyor with experience relating to tied pubs.

Reg 14 of the Pubs Code relates to short agreements.

Section 48(2) of the Small Business, Enterprise and Employment Act 2015 (SBEEA) states that “[i]f the Pubs Code specifies that particular provisions of the Pubs Code are arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with an arbitrable provision of the Pubs Code.”

Section 48(4) of SBEEA states that “[i]f the Pubs Code does not specify whether any of its provisions are arbitrable or not arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with any provision of the Pubs Code.”

Section 55(1)(c) of SBEEA provides the enforcement mechanisms available to the PCA where a POB fails to comply with the Pubs Code, including the ability to impose financial penalties.

4. Arbitrator’s Findings

After considering the parties’ pleadings, the Arbitrator found as follows:

Issue 1 – Basis for Financial Compensation

The Arbitrator acknowledged that all arbitral tribunals have to be careful not to exceed their power and noted that whilst section 55 of SBEEA enables the PCA (after an investigation finding breaches of the Pubs Code) to impose financial penalties on POBs, the Arbitrator accepted that there is no mention in the Pubs Code or SBEEA of any power for financial compensation to be awarded in the circumstances of this case. The Arbitrator upheld the POB’s submission that the arbitral tribunal does not have a statutory power in the arbitration to award damages or compensation.

In this respect, the Arbitrator referenced the Pubs Code Referral Award of Womack v. E I Group PLC (PCA reference ARB/106050/Womack-Quarter 1 2020) where the Tribunal considered its powers and relief sought by the TPT in that case and found that Arbitrators do not have jurisdiction relating to money claims.

Issue 2 – Conflict of Interest and encouragement to invest

Whilst the Arbitrator noted that Section 42(3) of SBEEA provides that the Secretary of State must ensure that the Pubs Code is consistent with the principles of fairness and lawful dealing, the Arbitrator noticed that the TPT’s head of claim made reference to regulations 9 – 14 of the Pubs Code. The Arbitrator found that there is no relevant provision of the Pubs Code covering conflict of interest and/or encouragement to invest and therefore there can be no breach of the Pubs Code. 

Issue 3 – Unfair Charges – Utilities and Billing Failures

The POB made submissions that the TPT did not specify any relevant breaches of the Pubs Code in relation to this head of claim. The Arbitrator accepted this submission on the basis that that there are no relevant provisions within the Pubs Code that cover unfair utilities charges and that the Pubs Code does not provide a remedy for what the TPT saw as damaging conduct by the POB. 

Issue 4 – Unfair Treatment and Charges

This ground related to alleged restrictions on drinks supplies and discrepancies in utility bills. The Arbitrator made a similar finding to issue (3), finding in favour of the POB that there are no relevant provisions in the Pubs Code that cover this head of claim, and that the grounds therefore fail. 

Issue 5 – GDPR breaches and inaccurate information provided by the First Respondent 

Whilst the Arbitrator noted that the separate legal proceedings brought against the TPT’s director in his personal capacity by the POB may have been distressing, there was no breach of the Pubs Code..

The Arbitrator did not uphold the TPT’s assertion in relation to the GDPR claim and the claim of inaccurate information provided to the Court.

Issue 6 – Breaches of TUPE Regulations

TUPE Regulations relate to the transfer of employees from one organisation to another when there is a change in the company providing services under a contract. The TPT asserted that its employees were approached during the transfer of the pub to a new tenant, which was in breach of those Regulations. The Arbitrator assessed the facts and noted that there was conflicting evidence on this, but that in any event there were no relevant provisions in the Pubs Code to cover alleged unlawful approaches to the TPT’s employees. The Arbitrator therefore had to find in favour of the POB.

Issue 7 – Unlawful use of intellectual property 

The Arbitrator could not find evidence in support of the TPT’s assertion that the subsequent tenant had unlawfully used the TPT’s name and intellectual property. The Arbitrator therefore could not find there had been a breach of intellectual property rights. However, the Arbitrator further found that the Pubs Code did not provide a remedy for this sort of claim. 

Issue 8 – Equipment and Maintenance Failures 

The Arbitrator noted that the TPT did not sufficiently particularise any losses that it claimed to have suffered, or set out a causal link between those losses and the actions of the POB. In any event, the Arbitrator also found that they did not have the power to award damages or financial compensation in a Pubs Code dispute. The Arbitrator therefore dismissed this head of claim as well.

5. Summary

The Arbitrator therefore held that there had not been any breach of the Pubs Code and, even if there were any breaches, there were no legal bases for financial compensation or damages to be awarded against the POB in the TPT’s favour. The Arbitrator clarified that any claim arising out of alleged breaches of the provisions of the Agreement were beyond the Arbitrator’s jurisdiction, and were also beyond the scope of the Pubs Code.