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Cite as: [1993] IECA 187

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Barran/Nutgrove S. C.(Management) Ltd [1993] IECA 187 (3rd December, 1993)

Notification No: CA/882/92E - Barranca/Nutgrove Shopping Centre (Management) Limited.

Decision No: 187.

Introduction

1. Notification was made by Barranca 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 an agreement between Barranca (as successor in title to Tesco Stores (Ireland) Ltd.) and Nutgrove Shopping Centre (Management) Ltd.

The Facts

(a) Subject of the notification

2. The notification concerns a deed of covenant relating to the supermarket unit in Nutgrove Shopping Centre, Rathfarnham, Dublin 14 between Barranca as Covenantor and Nutgrove Shopping Centre (Management) Ltd.

(b) The parties involved

3. Barranca as successor in title to Tesco Stores (Ireland) Ltd (Tesco) is the leaseholder of the supermarket unit at Nutgrove Shopping Centre. Nutgrove Shopping Centre (Management) Ltd (Nutgrove) is the manager of Nutgrove Shopping Centre.

(c) The notified arrangements

4. Under an agreement dated 17 December 1982 Tesco had agreed that on practical completion of the supermarket unit and shop units in the shopping centre it would enter into a covenant with Nutgrove in consideration of Nutgrove assumimg responsibility for the management of the shopping centre. The resulting deed of covenant which was notified was made on 5 December, l985. The deed of covenant provides for the standard restrictive clauses and obligations for the incorporation of the supermarket unit within the shopping centre and also includes the following restrictive user clauses viz.

(a) Under clause 1.9 Tesco covenants "To keep the premises for the purpose of Supermarket and Department Store to include Bakery and Goods preparation facilities and sale of liquor for consumption off the premises only PROVIDED ALWAYS that the

premises or any part thereof shall not be used for the purpose of a restaurant or cafe, and not without Nutgrove Management's consent in writing which shall not be unreasonably withheld to use or permit or suffer the same or any part thereof to be used for any other purpose."

(b) Under clause 2.02 Tesco covenanted "Not to assign or underlet the whole of the premises except for the purposes specified in Clause 1.9 hereof."

(c) Under clause 4.3 Nutgrove covenants "Nutgrove Management shall not permit any retail unit in Nutgrove Shopping Centre with a nett floor area in excess of 5,000 square feet (inclusive of aisles and check-out space) to be used wholly or partly for the sale of food or food products whether on the first leasing of the unit or after assignment or otherwise..."

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

Assessment - The Applicability of Section 4(1)

5. The Authority considers that Tesco was an undertaking at the time of the agreement and that its successor in title, Barranca and Nutgrove Shopping Centre (Management) Ltd are undertakings and that the notified agreement 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, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993 pp. 665-667). The Authority therefore considers that the notified agreement between Barranca and Nutgrove Shopping Centre (Management) Ltd does not offend against section 4(1) of the Competition Act, l99l.

The Certificate

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 Barranca and Nutgrove Shopping Centre (Management) Ltd in relation to the lease of the premises at Nutgrove Shopping Centre, Rathfarnham, Dublin 14, notified under Section 7 on 30 September, l992 (notification no. CA/882/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993