Irish Competition Authority Decisions

1. Notification was made by Superquinn on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991, or in the event of 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 units at Superquinn Shopping Centre, Sutton, Dublin 13.

2. The notification concerns the leases of shop units at Superquinn Shopping Centre, Sutton, between Superquinn as lessor and 5 separate lessees.

3. Superquinn are involved in the business of trading as a supermarket and the letting of shop units. The tenants are involved in various retail activities at the Shopping Centre.

4. The sample shopping centre lease notified related to Unit 2 and was executed on 7 September 1990 for a term of 35 years from 1 July 1990 between Superquinn as lessor and Hugh Crilly, trading as Crilly Shoe Repairs, as lessee. The restricted user clauses in this lease are as follows:-

(a) Under clause B.13 the tenant covenants

"Not without the prior consent in writing of the lessor.....to use or permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than that specified in the Fifth Schedule hereto........"

The Fifth Schedule reads under the heading "User"

"As a shop for the repair of shoes and for key cutting."

(b) Under clause B.46 the tenant covenants

"(a) Not to assign, underlet or part with or share the possession or occupation of any part of the Demised Unit........under any circumstances whatsoever.

(b) Not to assign, underlet or part with or share the possession of the whole of the Demised Units except to a suitable and solvent party and subject to the written consent of the Lessor.........."

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

5. Superquin has indicated that similar requirements attach to each of the other tenancies with the permitted user clause B.13 restricting each tenant to particular specified trading activities.

6. The Authority considers that Superquinn and its tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. 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 its tenants do not offend against Section 4 (1) of the Competition Act 1991.

8. 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 agreements between Superquinn and the tenants in relation to the lease of shop units at Superquinn Shopping Centre, Sutton,, Dublin 13 notified under Section 7 on 30 September 1992 (notification no. CA/944/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

13 October 1993