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Cite as: [1993] IECA 132

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Nabola Developments Ltd/Tenants of Maynooth S.C. [1993] IECA 132 (13th October, 1993)

Notification No. CA/923/92E - Nabola Developments Ltd/Tenants of Maynooth Shopping Centre

Decision No. 132

Introduction

1. Notification was made by Nabola Developments on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act 1991 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 in relation to Maynooth Shopping Centre.

The Facts

(a) The subject of the notification

2. The notification concerns the leases for shop units at Maynooth Shopping Centre, Maynooth, Co.Kildare between Nabola Developments Ltd as landlord and 17 separate tenants of the centre.

(b) The parties involved

3. Nabola Developments Ltd as successor in title to the previous landlords is engaged in the letting of shop units at Maynooth Shopping Centre. The tenants are involved in various retail activities at Maynooth Shopping Centre.

(c) The notified arrangements

4. Several shopping centre leases were notified. The restricted user clauses contained therein are summarised as follows:-

I. Lease dated 1 June 1974 between Michael Reilly & Sons Ltd as landlord and Patrick Nolan as tenant

(a) under clause 2(6) the tenant covenants

"Not without the previous consent in writing of the landlord to use or permit to be used the demised premises except for the business of a dry cleaners..."

II. Lease dated 25 June 1975 between Michael Reilly & Sons Ltd as landlord and Patrick Conroy, the tenant, whereby premises at the centre were demised to the tenant for a period of 21 years from 1973 described as

"all that the apartment for use as a Chemist..."

Under clause 6 of this lease the tenant covenants

"not without the previous consent in writing of the landlord to use or permit to be used the demised premises except for the business of...".

III. The standard lease notified in relation to a further 11 tenancies contains the following:-

(a) Under clause III 10 the tenant covenants

"To use the demised premises for the purpose of the retail sale of ...."

(b) Under clause IV 4 the Landlord covenants

"Unless the demised premises shall cease to be used for the user permitted by Clause 10 of Section 3 hereof, the Landlord shall not during the demised term carry on or permit or suffer to be carried on by others in or upon any part of Maynooth Shopping Centre (including the Supermarket belonging to the Landlord) the trade or business of retail sale .....

Nabola have advised that similar restricted user and exclusive user clauses apply to each of the 11 tenancies restricting each tenant to (and excluding for him at the centre) particular specified trading activities.

IV. 4 further leases in relation to individual tenancies were notified with similar restricted user clauses confining each tenant to particular specified trading activities.

Each of the leases at I to IV above also contain standard restrictions relating to assigning sub-letting of the property as well as a number of other standard restrictive covenants and obligations.

Assessment - The applicability of Section 4 (1)

5. The Authority considers that Nabola Developments Ltd and the tenants 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 Nabola Developments and the tenants do not offend against Section 4 (1) of the Competition Act 1991.

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 agreements between Nabola Developments Ltd and its tenants in relation to the leases of the shop units at Maynooth Shopping Centre, Maynooth, Co. Kildare notified under Section 7 on 30 September 1992 (notification no. CA/923/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

13 October 1993