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Cite as: [1993] IECA 215

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Salix Trust Ltd/The Square Management Ltd/ 13 Tenants of the Square Towncentre, Tallaght [1993] IECA 215 (3rd December, 1993)

Notification No: CA/841/92 - Salix Trust Limited/The Square Management Limited/13 Tenants of the Square, Tallaght.

Decision No: 215.

Introduction

1. Notification was made by Salix Trust 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 a refusal by the Competition Authority to issue a certificate, a licence under Section 4(2) in respect of leases between Salix Trust Limited and The Square Management Limited, Salix Trust Ltd and 13 tenants of the The Square Towncentre, Tallaght.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to 23 shop units in The Square Towncentre, Tallaght, Dublin 24 between The Square Management Limited, as Freeholder, Salix Trust Limited as landlord and 13 tenants of the units.

(b) The parties involved

3. The Square Management Limited is the freeholder (and owner) of The Square Towncentre, Tallaght, Dublin 24. Salix Trust Limited is the landlord of 23 units in The Square, Towncentre. The tenants are engaged in various retail and service activities at the shopping centre.

(c) The notified arrangements

4. The standard shopping centre lease notified contains the following restricted user clauses viz.

(a) Under clause 3.2(3) the tenant covenants with the landlord "Not, without the prior consent in writing of the Landlord and the Freeholder or their respective Agents thereunto lawfully authorised, to use or permit or suffer to allow the Demised Premises or any part thereof, to be used for any purpose other than PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant, or any Undertenant of the Tenant, for liberty to alter or change the aforesaid permitted use of the Demised Premises the Landlord and the Freeholder shall not unreasonably withhold their consent..."

(b) Under clause 3.2(5) the tenant covenants with the landlord "Not to assign transfer, underlet, mortgage, charge or part with the possession or occupation of the Demised Premises or any part thereof or suffer any person to occupy the Demised Premises or any part thereof as a licensee or concessionaire except with the previous consent in writing of the Landlord and the Freeholder BUT SO THAT NOTWITHSTANDING the foregoing the Landlord and the Freeholder shall not unreasonably withhold its consent ..."

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

5. Salix Trust Ltd has supplied details of the permitted user under clause 3.2(3) attaching to each lease whereby the tenant is restricted to particular specified retail or service activities. In addition details of exclusive user granted in respect of 3 tenancies have also been supplied.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that Salix Trust Limited, The Square Management Ltd 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 l0 September, l993, pp. 665-667). In fact, in this case, the arangements provide for the location of competing outlets in the centre so no question of a restriction on competition arises. The Authority therefore considers that the notified agreements between Salix Trust Limited, The Square Management Limited 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 The Square Management Limited, Salix Trust Ltd and their tenants in relation to the lease of premises at The Square Towncentre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/841/92), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993