Irish Competition Authority Decisions

1. Notification was made by Salix Trust Limited and IBI Nominees Limited on 30 September, 1992 with a request for a certificate under Section 4(4) of the Competition Act 1991 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/ IBI Nominees Limited and the tenants at Merchants Quay Shopping Centre.

2. The notification concerns the leases relating to shop units in Merchants Quay Shopping Centre, Merchants Quay, Cork between Salix Trust Limited and IBI Nominees Limited as joint landlords and the tenants of the centre.

3. Salix Trust Limited and IBI Nominees Limited are both engaged in the investment of funds and are the joint owners and landlords of the Merchants Quay Shopping Centre. The tenants under the 44 leases involved are engaged in various retail and service activities at the shopping centre.

4. The standard shopping centre lease notified is in draft form. The restricted user clauses in the lease are as follows:

(a) Under clause 4(10) the tenant covenants with the landlord

"(b) Not without the prior consent in writing of the Landlord or its Agent thereunto lawfully authorised to use or to permit or suffer or allow the Demised Premises or any part or parts thereof to be used for any purpose other than as a retail shop for the Permitted Business 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 authorised under-tenant of the Tenant for liberty to alter or change the Permitted Business the Landlord shall not unreasonably withhold its consent...."

(b) Under clause 4(24) the tenant covenants with the landlord

"(a) Not to assign, transfer, underlet, charge, mortgage, encumber, hold on trust for another 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 as concessionaire BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall not unreasonably withhold its consent......"

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

5. The landlords have supplied details of the permitted user under clause 4(10) applying to each of 44 leases under which each tenant is restricted to particular specified retail or service activities. In addition exclusive has been granted by the Landlords in relation to a bank, a pharmacy and a hairdressers.

6. The Authority considers that Salix Trust Limited, IBI Nominees 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 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, 1993 in respect of shopping centre leases (Iris Oifigiuil of 10 September, 1993, pp. 665-667). The Authority therefore considers that the notified agreements between Salix Trust Limited, IBI Nominees Limited and their tenants do not offend against Section 4(1) of the Competition Act, 1991.

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 Salix Trust Limited, IBI Nominees Limited and their tenants in relation to the lease of premises at Merchants Quay Shopping Centre, Merchants Quay, Cork notified under Section 7 on 30 September 1992 (notification no. CA/508/92), do not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

15 December 1993