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Cite as: [1993] IECA 120

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Superquinn/Tenants of Sundrive S.C. [1993] IECA 120 (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/946/92E - Superquinn Ltd./ Tenants of Sundrive Shopping Centre.

Decision No: 120

Price £0.30

£0.70 incl. postage

Notification No CA/946/92E - Superquinn/Tenants of Sundrive Shopping Centre

Decision No: 120

Introduction

1. Notification was made by Superquinn 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 leases between Superquinn and the tenants of Sundrive Shopping Centre.

The Facts

(a) The subject of the notification

2. The notification concerns the leases of shop units at Sundrive Shopping Centre, Sundrive Road, Kimmage, Dublin 6, between Superquinn, as landlord and 14 tenants of the shopping centre.

(b) The Parties involved

3. Superquinn is engaged in trading as a supermarket and in the letting of shop units at shopping centres. The tenants are engaged in various retail activities at Sundrive Shopping Centre.

(c) The notified arrangements

4. The sample shopping centre lease notified was in respect of Unit 1 and was made on 24 November, l984 for a term of 32 years from l October, l984. The restricted user clauses in the sample lease are as follows:-

(a) Under clause 4.26 the tenant covenants

" Not without the prior consent in writing of the Landlord .....to use or to permit or suffer or allow the Demised unit or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever...."

2. Part II of the First Schedule, under the heading permitted user, reads

"Retail Newsagent Shop including sale of stationery, gifts, souvenirs, sweets, confectionery.......provided that neither the shop unit nor any part thereof is used as a specialised record or cassette shop or......the intention being that the premises shall be a general newsagent shop not competing with other specialised shops within the Centre."

(b) Under clause 4.25 the tenant covenants with the landlord

"Not to assign transfer or underlet or part with possession or occupation save in relation to the creation of a mortgage of the Demised Unit or any part thereof or suffer any person to occupy the Demised Unit or any part thereof as a licensee or as concessionaire BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall subject to sub-clause 9.4 hereof not unreasonably withhold its consent to an assignment transfer or under-letting of the entire of the Demised Unit or to the suffering of any person to occupy the entire of the Demised Unit as a licensee or concessionaire."

3. In addition, there are a number of other standard restrictive covenants and obligations in the lease.

4. Superquinn has advised that similar restrictions apply to each tenancy with the permitted user clause 4.26 confining each tenant to particular specified trading activities.

Assessment- The Applicability of Section 4(1)

5. The Authority considers that Superquinn and the tenants of Sundrive Shopping Centre are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

6. The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do 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 agreements between Superquinn and the tenants of Sundrive Shopping Centre do not offend against Section 4(1) of the Competition Act, l99l.

The Certificate

7. The Competition Authority has issued the following certificate.

5. The Competition Authority certifies that in its opinion, on the basis of the facts in its possession, the agreements between Superquinn and the tenants of Sundrive Shopping Centre, Sundrive Road, Kimmage, Dublin 6, in relation to the lease of premises, notified under Section 7 on 30 September 1992 (notification no. CA/946/92E), do not offend against Section 4(1) of the Competition Act, l99l.

6. For the Competition Authority

Des Wall

Member

13 October 1993