Irish Competition Authority Decisions

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.

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.

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.

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.

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