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Cite as: [1993] IECA 166

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Caledonian Insurance Co/ Tenants of Grafton Arcade (Newer leases) [1993] IECA 166 (3rd December, 1993)

Notification No: CA/533/92E - Caledonian Insurance Company/ Tenants of Grafton Arcade (Newer leases)

Decision No: 166.

Introduction

1. Notification was made by Caledonian Insurance Company (Caledonian) 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 Caledonian and tenants of Grafton Arcade.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to shop and other units at Grafton Arcade, 13/14 Grafton St, Dublin 2 between Caledonian as Lessor and the tenants.

(b) The parties involved

3. Caledonian is a wholly owned subsidiary of Guardian Royal Exchange plc and is engaged in the business of insurance. The tenants are engaged in various retail and service activities at Grafton Arcade.

(c) The notified arrangements

4. 12 leases were notified including a standard lease. The restricted user clauses in the standard lease are as follows:

(a) Under clause 2.9 the lessee covenants "Not without the prior consent in writing of the Lessor or its agent thereunto lawfully authorised to use or permit or suffer or allow the Demised premises or any part or parts thereof to be used for any purpose other than and for no other purpose or purposes whatsoever.........."

(b) Under clause 2(15) the lessee covenants "Not to assign, transfer or underlet or share or part with the possession or occupation of the Demised premises or any part thereof ....... BUT SO THAT NOTWITHSTANDING the foregoing the Lessor shall not unreasonably withold its consent ......."

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

5. Similar clauses are included in the other leases furnished whereby each tenant is restricted to particular specified trading activities.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that Caledonian 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, l993 in respect of shopping centre leases (Iris Oifigiuil of 10 September, l993, pp. 665-667). The Authority therefore considers that the notified agreements between Caledonian Insurance Company and the tenants do not offend against Section 4(1) of the Competition Act, l99l.

The Certificate

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 Caledonian Insurance Company and the tenants in relation to the lease of premises at the Grafton Arcade, 13/14 Grafton St, Dublin 2, notified under Section 7 on 30 September, l992 (notification no. CA/533/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993