Irish Competition Authority Decisions

1. Notification was made by Abbey Life Assurance (Ireland) Limited 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 a lease between Abbey Life Assurance (Ireland) limited and Hayes Bookshops Ltd.

2. The notification concerns the lease for shop unit 21 at Merrion Shopping Centre, Merrion Rd, Dublin 4 between Abbey Life Assurance (Ireland) Limited as lessor and Hayes Bookshops Ltd as lessee.

3. Abbey Life Assurance (Ireland) Limited is engaged in the business of assurance and investment management and is landlord of shop units in the Merrion Centre. Hayes Bookshops Ltd trades as a bookshop at the centre.

4. The shopping centre lease notified was made on 1 May 1991 for a period of 35 years from 22 April 1991. The restricted user clauses in this lease are as follows:

(a) Under Clause 4.18 the lessee covenants "Throughout the said Term to use the Demise Unit for the Permitted User and for such purposes as the the Lessor and the Management Company shall approve of in writing,........ PROVIDED ALWAYS that with the previous consent of the Lessor and the Management Company (not to be unreasonably withheld) the Demised Unit may be used for some other retail trade or business ....... BUT IT IS HEREBY DECLARED that the Lessor and the Management Company shall be entitled at their sole discretion to withhold any such consent required as aforesaid if they consider that (a) the alternative user will compete excessively with any trade or business being carried on, upon or in any other portion of the Merrion Centre ......

(b) Under Clause 4.41 the Lessee further covenants

".1 With the Lessor and with the Management Company, not to use or permit to be used the Demised Unit or any part thereof for the sale of food or food products

.2 With the Lessor and with the Management Company, not to assign or grant a lease or tenancy for any term of the Demised Unit or any part thereof unless the assignee or lessee........shall covenant with the Owner not to grant any sub-lease of the Demised Unit or any part thereof or permit the Demised Unit or part thereof to be used for the purpose of the sale of food or food products.........."

(c) Under clause 1 "Permitted User means the use of the Demised Unit as a retail shop for the sale of Books."

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

5. The Authority considers that Abbey Life Assurance (Ireland) Limited and Hayes Bookshops Ltd are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. The Authority considers that the notified agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does 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 agreement between Abbey Life Assurance (Ireland) Limited and Hayes Bookshops Ltd does not offend against Section 4 (1) of the Competition Act 1991.

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 agreement between Abbey Life Assurance (Ireland) Limited and Hayes Bookshops Ltd in relation to the lease of premises at Merrion Shopping Centre, Merrion Rd., Dublin 4 notified under Section 7 on 30 September 1992 (notification no. CA/741/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member

3 December 1993