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Cite as: [1993] IECA 222

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Ballyvolane Ltd/Tenants of Ballyvolane S.C. [1993] IECA 222 (15th December, 1993)

Notification No: CA/879/92E - Ballyvolane Limited/Tenants of Ballyvolane Shopping Centre

Decision No: 222

Introduction

1. Notification was made by Ballyvolane 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 a standard lease between Ballyvolane Limited and its tenants at Ballyvolane Shopping Centre.

The Facts

(a) Subject of the notification

2. The notification concerns the leases relating to the shop units in Ballyvolane Shopping Centre, Ballyvolane, Cork between Ballyvolane Limited as landlord and 6 tenants.

(b) The parties involved

3. Ballyvolane Limited is the owner and landlord of the Ballyvolane Shopping Centre. 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 4 (17) the tenant covenants with the landlord:

"(a) Not to assign underlet or part with the possession control or occupation of nor to franchise the use of part only of the demised premises;

(b) Not to assign underlet or part with the possession of control or occupation of nor to franchise the use of the whole of the demised premises without the consent in writing of the Landlord first obtained which consent shall not be unreasonably withheld..."

(b) Under clause 4 (20) the tenant covenants with the landlord "Not to use or occupy the demised premises or any part thereof or permit same to be used or occupied except with the consent in writing of the Landlord... for any other purpose than the retail trade or business of nor in any manner inconsistent with such user or occupation..."

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

5. Ballyvolane Ltd has furnished details of the permitted user under clause 4 (20) attaching to each of the 6 leases whereby the tenant is restricted to particular specified retail or service activities.

Assessment - The Applicability of Section 4(1)

6. The Authority considers that Ballyvolane Limited and its 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). The Authority therefore considers that the notified agreements between Ballyvolane Limited and its 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 Ballyvolane Limited and its tenants in relation to the lease of premises at Ballyvolane Shopping Centre, Ballyvolane, Cork, notified under Section 7 on 30 September, l992 (notification no.CA/879/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993