Irish Competition Authority Decisions

1. Notification was made by Merrion Shopping Centre Ltd 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 standard lease between Merrion Shopping Centre Ltd (the Management Company) and Abbey Life Assurance (Ireland) Ltd, Pesenta, Dunloe House Group plc, Holland Brooklands Ltd, Irish Life Assurance plc (the Landlords) and 26 tenants at the Merrion Shopping Centre.

2. The notification concerns the standard lease for shop units in Merrion Shopping Centre, Merrion Road, Dublin 4, between the Landlords, the Management Company and the tenants.

3. Merrion Shopping Centre Ltd is the manager of Merrion Shopping Centre while the Landlords are engaged in the letting of shop units at the centre. The tenants are engaged in various retail and service activities at the centre.

4. The notified shopping centre lease is in draft form and contains the following restricted user clauses viz.

(a) Under Clause 3.18 the lessee covenants with the Landlord and where specified with the Management Company "Throughout the said term to use the Demised Unit solely for the trade or business of the sale and for such other purpose as the Lessor and the Management Company shall approve of in writing subject to the other terms hereof but not further or otherwise PROVIDED ALWAYS that with the previous consent in writing of the Lessor and the Management Company (not to be unreasonably witheld) the demised Unit may be used for some other retail trade or business (hereinafter referred to in the clause as "the alternative user") 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 or upon any other portion of the Office Block at the time of such application for consent or ......"

(b) Under Clause 3.40 the Lessee covenants "Not to assign, transfer, underlet, or part with the possession or occupation of the Demised Unit or any part thereof or suffer any person to occupy the Demised Unit or any part thereof as a licencee ........"

(c) Under Clause 3.42 (a) "The Lessee covenants with the Lessor and 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" while under clause 3.42(b) " The Lessee further covenants with the Lessor and the Management Company that it will not assign....the Demised Unit or any part thereof...unless the assignee....shall enter into a deed of covenant with the owner for the time being of the Supermarket......not to permit the Demised Unit or any part thereof .....to be used for the purpose of the sale of food or food products....."

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

5. The Authority considers that Merrion Shopping Centre Ltd and the Landlords and the tenants 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 standard 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 Merrion Shopping Centre Ltd, Abbey Life Assurance (Ireland) Ltd, Pesenta, Dunloe House Group plc, Holland Brooklands Ltd, Irish Life Assurance plc and the tenants 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 standard agreement between Abbey Life Assurance (Ireland) Limited, Pesenta, Dunloe House Group plc, Holland Brooklands Ltd, Irish Life Assurance plc and Merrion Shopping Centre Ltd and the tenants 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/884/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member

3 December 1993