Irish Competition Authority Decisions

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Cite as: [1993] IECA 248

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James Davey/The Governor & Company of the Bank of Ireland [1993] IECA 248 (15th December, 1993)

Notification No: CA/323/92E - James Davey/The Governor and Company of the Bank of Ireland

Decision No: 248

Introduction

1. Notification was made by the Governor and Company of the Bank of Ireland (Bank of Ireland) 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 lease between James Davey and the Bank of Ireland.

The Facts

(a) Subject of the notification

2. The notification concerns the lease of a unit in the Caherdavin Shopping Centre, Ennis Road, Limerick between James Davey as lessor and the Bank of Ireland as lessee.

(b) The parties

3. The Bank of Ireland is the second largest commercial bank in the State with a network of 290 branches including the branch at Caherdavin Shopping Centre. James Davy is engaged in the letting of shop units at the centre.

(c) The notified arrangements

4. The notified lease was made on 9 September, l975 for a period of 21 years from 1 August, l975. The restricted user clauses in the lease are as follows:

(a) Under clause 2(f) the lessee covenants with the lessor "To use the said premises for business purposes only and for no other purpose and not in any circumstances to use or permit to be used the same or any part thereof as a residence or dwelling. And shall not use the said premises for the business of Grocer, Victualler, Supermarket, Chemist, Draper or Hairdresser."

(b) Under clause 2(i) the lesse covenants "Not to assign, underlet or part with possession of the said premises or any part thereof provided however that the Lessee may at any time determine the within Lease by giving the Lessor three months notice in writing...."

(c) Under clause 4(a) the lessor covenants with the lessee "That he shall not permit any other Bank on any of its property within a radius of three-quarters of a mile of the demised premises."

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

Assessment - The Applicability of Section 4(1)

5. The Authority considers that James Davey and the Bank of Ireland are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the state.

6. The Authority considers that the notified agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does 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 10 September 1993, pp.665-667). The Authority therefore considers that the notified agreement between James Davey and the Bank of Ireland 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 James Davey and the Governor and Company of the Bank of Ireland in relation to the lease of the premises at Caherdavin Shopping Centre, Cahirdavin, Limerick notified under Section 7 on 30 September 1992 (notification no.CA/323/92E), does not offend against Section 4(1) of the Competition Acts, l99l.

For the Competition Authority

Des Wall

Member

15 December 1993