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Cite as: [1993] IECA 167

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Caledonian Insurance Co/ Tenants of Grafton Arcade (Older leases) [1993] IECA 167 (3rd December, 1993)

Notification No: CA/541/92E - Caledonian Insurance Company/ Tenants of Grafton Arcade (Older leases)

Decision No: 167.

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

(a) Under clause 2(j) the lessee covenants "To use or occupy the demised premises for the sole purpose of carrying on the business of the and will not use or suffer to be used the premises or any part thereof .......... for any purpose inconsistent with such permitted user........"

(b) Under clause 2(n) the lessee covenants "Not to assign transfer underlet part with or share the actual possession of the premises or any part thereof without the previous consent in writing of the Lessor which consent shall not be unreasonably withheld."

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

5. The leases furnished contain details of the permitted user under clause 2(j) applicable to each tenancy whereby the tenant is restricted to particular specified trading activities. In addition one lease contains an exclusive user clause whereby the Lessor covenants not to permit within the Arcade "the trade or business of a souvenirs and gift shop."

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/541/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993