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Superior Drug Company Ltd/The Governor & Company of Bank of Ireland [1993] IECA 109 (13th October, 1993)
URL: http://www.bailii.org/ie/cases/IECompA/1993/109.html
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[1993] IECA 109
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Superior Drug Company Ltd/The Governor & Company of Bank of Ireland [1993] IECA 109 (13th October, 1993)
COMPETITION
AUTHORITY
Competition
Authority Decision of 13 October 1993 relating to a proceeding under Section 4
of the Competition Act, 1991.
Notification
No. CA/337/92E - Superior Drug Company Ltd/The Governor and Company of the Bank
of Ireland.
Decision
No. 109
Price £0.30
£0.70 incl. postage
Notification
No. CA/337/92E -Superior Drug Company Ltd/ The Governor and Company of the Bank
of Ireland
Decision
No. 109
Introduction
1. Notification
was made by the Governor and Company of the Bank of Ireland (Bank of Ireland)
on 30 September, l992 with a request for a certificate under Section 4(4) of
the Competition Act, l99l or, in the event of a refusal by the Competition
Authority to issue a certificate, a licence under Section 4(2), in respect of a
lease between Superior Drug Company Ltd and the Bank of Ireland.
The
Facts
(a) Subject
of the notification
2. The
notification concerns the lease of shop units, Nos.6 and 6A in the Malahide
Shopping Centre, Malahide, Co. Dublin between Superior Drug Company Ltd as
Lessor and Bank of Ireland as lessee.
(b) The
parties
3. The
Bank of Ireland is the second largest commercial bank in Ireland with a network
of 290 branches including the branch at Malahide Shopping Centre. Superior Drug
Company Ltd is engaged in the letting of shop units at Malahide Shopping Centre.
(c) The
notified arrangements
4. The
notified lease was made on 25 June, l976 for a period of 250 years from l
January l975. The restricted user clauses in the lease are as follows:
(a) Under
clause l4 of the Sixth Schedule the tenant covenants with the landlord
"....
nor shall any trade or business other than that specified in the Ninth Schedule
hereto be carried on without the consent in writing of the Lessor under seal."
The
ninth schedule under "Permitted User" reads "General Banking and Office
Purposes."
(b) Under
clause l6 of the Sixth Schedule the tenant covenants with the landlord that:
"(a)
The
Lessee shall not assign part only of the premises.
(b)
The
Lessee shall not assign the premises to any person who does not upon or before
the assignment accept a transfer of the Lessee's share in the Management
Company and become registered as a member of the Management Company as holder
of that share.
(c)
The
Lessee shall not at any time underlet the premises or any part thereof without
the prior written consent of the Lessor ......".
(c) Under
clause 14 of the Seventh Schedule the landlord covenants that
"The
Lessor shall not sell, lease, sub-let or in any way or manner grant the right
to carry
on
the
business of:
(a) Banking,
Building Society, Finance Company, Credit Union and/or savings Bank to any
other person.....in any shop situate on the estate or any extension of the same
save and except that shop Number 6 and 6a may be leased to a Bank, one shop may
be leased to a Building Society and another may be used as a Post Office."
In
addition, there are a number of other standard restrictive covenants and
obligations in the lease.
Assessment
- The Applicability of Section 4 (1)
5. The
Authority considers that the Bank of Ireland and Superior Drug Company Limited
are undertakings and that the notified lease is an agreement between
undertakings. The agreement has effect within the State.
6. The
Authority considers that the notified agreement, and its restricted and
exclusive user clauses and the other standard restrictive clauses and
obligations, does not have the object or effect of preventing, restricting or
distorting competition in trade in any goods or services in the State or in any
part of the State, for the reasons given in the Notice of the Authority of 2
September 1993 in respect of shopping centre leases (Iris Oifigiuil 10
September 1993, pp.665-667). The Authority therefore considers that the
notified agreement between Superior Drug Company Limited and Bank of Ireland
does not offend against Section and of the Competition Act, l99l.
The
Certificate
7. The
Competition Authority has issued the following certificate:
The
Competition Authority certifies that in its opinion, on the basis of the facts
in its possession, the agreement between the Superior Drug Company Limited and
The Governor and Company of the Bank of Ireland in relation to the lease of the
premises at Malahide Shopping Centre, notified under Section 7 on 30 September
1992 (notification no. CA/337/92E), does not offend against Section and of the
Competition Act, l99l.
For
the Competition Authority
Des
Wall
Member
13
October 1993
© 1993 Irish Competition Authority