Irish Competition Authority Decisions

1. Notification was made by D. Horkan Limited on 30 September, l992 with a request for a certificate under Section 4(4) of the Competition Act, l99l or in the event of refusal by the Competition Authority to issue a certificate, a licence under Section 4(2), in respect of a lease between Michael Kavanagh and D. Horkan Limited.

2. The notification concerns the lease of the supermarket unit unit at Orwell Shopping Centre, Templeogue, Dublin 6 between Michael Kavanagh as lessor and D. Horkan Limited as lessee.

3. Michael Kavanagh as landlord is engaged in the letting of shop units at Orwell Shopping Centre. D. Horkan Limited trades as a supermarket under the "Londis" name at the shopping centre.

4. The notified shopping centre lease was in draft form and covers a term of 35 years from l November, l992. The exclusive user clauses in this lease are as follows:-

(i) Under Clause 4.15 the lessee covenants with the lessor "Not without the consent in writing of the Lessor which consent shall not be unreasonably withheld or delayed to use or permit or suffer the demised premises or any part thereof to be used for any purpose other than:-

(a) The carrying on of the business of a supermarket with a full off-licence which use shall be exclusive to the Lessee within the Shopping Centre;

(b) The carrying on of the business of a boutique and/or bakers which uses shall not be exclusive to the Lessee within the shopping centre;

(ii) Under Clause 5.7 the Lessor covenants with the lessee "To ensure that the Lessees exclusivity as referred to in Clause 4.15 is maintained at all times and without derogation from the generality of the foregoing not to make any lettings in contravention thereof. Furthermore, the Lessor agrees not to grant any new leases from the date hereof for any existing or new units in the Shopping Centre for use either as a boutique or a bakery. The Lessor shall be entitled to grant a lease to any party for use of a unit as a coffee shop to include the baking of confectionery and other bakery products for consumption on the premises only."

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

5. Similar undertakings to 5 (ii) above were provided by Michael Kavanagh as Vendor to D. Horkan Ltd as purchaser in relation to a sale contract relating to the premises dated 4 June 1992.

6. The Authority considers that D. Horkan Limited and Michael Kavanagh are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

7. 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 Michael Kavanagh and D. Horkan Limited does not offend against Section 4(1) of the Competition Act, l99l.

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 agreement between D. Horkan Limited and Michael Kavanagh in relation to the lease of the premises at Orwell Shopping Centre, Templeogue, Dublin 6 notified under Section 7 on 30 September 1992 (notification no. CA/814/92E), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993