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 Coompetition 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 between Superquinn and tenants at the Superquinn Ballinteer Centre.

2. The notification concerns the lease of shop units in the Superquinn-Ballinteer Centre, Ballinteer Avenue, Dublin 16, between Superquinn as Lessor and 12 tenants at the shopping centre.

3. Superquinn is engaged in trading as a supermarket and in the letting of shop units at the Ballinteer Superquinn Centre. The tenants are engaged in a variety of retail activities at the centre.

4. The standard shopping centre lease notified which relates to unit 3 was executed on 17 November, l978 for a period of 35 years from 15 November 1974 between Abbey Properties Ltd as lessor and Harold S. Elmes Ltd as lessee.The restricted user clauses in this lease are as follows:-

(a) Under clause 3.21 the tenant covenants:-

"to use the demised premises for the purposes of the business of the Lessee as set forth in the Third Schedule Hereto....." and under clause 3.22 the tenant covenants "Not without the previous consent in writing of the Lessor to use or permit or suffer the demised premises or any part thereof to be used for any other purpose or purposes than that or those set forth in the Third Schedule hereto........".

The Third Schedule reads "THE PURPOSE FOR WHICH THE DEMISED PREMISES MAY BE USED -For the purpose of the Lessee's business only as Merchants of Wool, Drapery, Haberdashery, Domestic Goods and appliances, Hardware, D.I.Y goods, China, Glass, Furniture and Furniture Accessories."

(b) Under clause 3.26 the tenant covenants:-

"Not to assign, under-let or part with or share the possession or occupation of the demised premises or any part thereof or suffer any person to occupy or use the demised premises or any part therof .........without the consent in writing of the lessor....."

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

5. Superquinn have advised that similar leases apply to each of 12 tenancies at the centre with the restricted user clauses 3.21 and 3.22 restricting each tenant to particular specified retail activities.

6. The Authority considers that Superquinn and the 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 the tenants do not offend against section 4(1) of the Competition Act l99l.

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 leases of premises at Superquinn-Ballinteer Centre, Ballinteer Rd., Dublin 16 notified under Section 7 on 30 September 1992 (notification no. CA/890/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993