Irish Competition Authority Decisions

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Cite as: [1993] IECA 238

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Patrick Kennedy/Michael & Bridget Brady [1993] IECA 238 (15th December, 1993)

Notification No: CA/97/92 - Patrick Kennedy/Michael and Bridget Brady.

Decision No: 238

Introduction

1. Notification was made by Michael and Bridget Brady on 18 September, 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991 in respect of a transfer agreement between Patrick Kennedy and Michael and Bridget Brady.

The Facts

(a) Subject of the notification

2. The notification concerns the agreement relating to the transfer on sale of two units in the Kennedy Shopping Centre, Maynooth Road, Celbridge, Co. Kildare between Patrick Kennedy as transferor and Michael and Bridget Brady as transferees.

(b) The parties involved

3. Michael and Bridget Brady, under a previous lease, were trading as a newsagency and grocers in the Kennedy Shopping Centre. Patrick Kennedy is the Landlord of the centre.

(c) The notified arrangements

4. The notified deed of Transfer was completed on 19 November, 1992. The Second Schedule of the Deed of Transfer contains a covenant by the Transferor (and owner) whereby he covenants with the Transferees "Not to allow the property retained by the Transferor and described on Folio 488 LF of the Register County Kildare to be used for the purposes of a newsagency, light grocery, confectionery, or for the sale of ice-cream or for any one of a number of the said uses".

Assessment - The Applicability of Section 4(1)

5. The Authority considers that Patrick Kennedy and Michael and Bridget Brady are undertakings and that the notified transfer agreement is an agreement between undertakings. The agreement has effect within the State.

6. The Transfer agreement contains an exclusive user clause whereby the landlord of the Shopping Centre covenants not to allow the remaining units in the centre to be used for the purposes of a newsagency, light grocery, confectionery or the sale of ice cream. In its notice on Shopping Centre Leases which was published in Iris Oifigiuil on 10 September 1993 (pp.665-667) the Authority expressed its conclusion that such restricted user clauses in shopping centre leases do not generally offend against Section 4(1) of the Competition Act 1991 for the reasons stated in that notice. The Authority would also take the view that the inclusion of restricted user covenants in agreements for the sale or transfer of landlord or lessee interests in shopping centre leases similarly would 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. The Authority therefore considers that the notified agreement between Patrick Kennedy and Michael and Bridget Brady does not offend against section 4(1) of the Competition Act, l99l.

The Certificate

7. 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 Patrick Kennedy and Michael and Bridget Brady in relation to the sale of the premises at the Kennedy Shopping Centre, Celbridge, Co. Kildare notified under Section 7 on 18 September 1992 (notification no. CA/97/92), does not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993