Irish Competition Authority Decisions

1. Notification was made by Morningford 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 Morningford Limited and the tenants at Mahon Shopping Centre.

2 The notification concerns leases relating to the shop units in Mahon Shopping Centre, Avenue De Rennes, Mahon, Blackrock, Cork between Morningford Limited as landlord and 8 tenants.

3. Morningford Ltd is the owner and landlord of the Mahon Shopping Centre. The tenants are engaged in various retail or service activities at the centre.

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

(a) Under clause 4.25 the tenant covenants with the landlord: "Not to assign transfer or underlet or part with possession or occupation save in relation to the creation of a mortgage of the Demised Unit or any part thereof or suffer any person to occupy the Demised Unit or any part thereof or ..........as a licensee or as concessionaire But So That Notwithstanding the foregoing the Landlord shall ... not unreasonably withhold its consent..."

(b) Under clause 4.26.1 the tenant covenants with the landlord. "Not without the prior consent in writing of the Landlord or its Agent thereunto lawfully authorised which consent shall not be unreasonably withheld to use or to permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than as set forth in part II of the First Schedule hereto and for no other purpose or purposes whatsoever... Provided Always And It Is Hereby Agreed And Declared that upon any application by the Tenant or any under-tenant of the Tenant for liberty to alter or change the aforesaid permitted user of the Demised Unit the Landlord shall not unreasonably withhold its consent...."

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

5. Morningford Ltd has supplied details of the permitted user under clause 4.26.1 attaching to each lease whereby the tenant is restricted to particular specified trading or service activities.

6. The Authority considers that Morningford Limited 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 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 Morningford Limited and its tenants do 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 agreements between Morningford Limited and its tenants in relation to the lease of premises at Mahon Shopping Centre, Ave de Rennes, Mahon, Blackrock, Co. Cork notified under Section 7 on 30 September 1992 (notification no. CA/343/92/E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993