Irish Competition Authority Decisions

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Riga Ltd/Thomas J. O'Connor [1993] IECA 57 (5th October, 1993)

COMPETITION AUTHORITY

Competition Authority Decision of 5 October 1993 relating to a proceeding under Section 4 of the Competition Act, l99l.

Notification No: CA/289/92E - Riga Ltd/Thomas J. O'Connor

Decision No: 57

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Notification No. CA/289/92E - Riga Ltd/Thomas J. O'Connor

Decision No. 57

Introduction

1. Notification was made by Thomas J. O'Connor on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991, in respect of a lease between Riga Ltd and Thomas J. O'Connor.

The Facts

(a) The subject of the notification

2. The notification concerns the lease of a shop unit, Unit 10, at Douglas Shopping Centre, Douglas, Co. Cork between Riga Ltd as lessor and Thomas J. O'Connor as lessee.

(b) The parties involved

3. Riga Ltd is engaged in the business of letting shop units at Douglas Shopping Centre. Thomas J. O'Connor trades as a Retail Chemist at Unit 10 Douglas Shopping Centre.

(c) The notified arrangements

4. The notified shopping centre lease was executed on 5 February 1973 between Shop Properties Ltd as lessors and John O'Riordan as lessee for a period of 35 years from 1 December 1971. The restricted user clauses in the lease are as follows:

(a) Under clause 2 (18)(a) the tenant covenants

"Not to use or permit the demised premises or any part thereof to be used for any purpose other than for a Chemist."

(c) Under clause 2 (20) (a) the tenant covenants with the landlord

"Not to assign, underlet or part with possession or permit the occupation by a licencee of the demised premises or any part thereof....PROVIDED THAT as regards the demised premises as a whole and not in respect of any less part the lessee shall be at liberty subject to the following conditions to assign or underlet the whole of the demised premises upon obtaining the prior consent in writing of the Lessors such consent not to be unreasonably witheld.......

The Applicant has also advised that a clause exists providing that no more than 2 Chemists will carry on business as Chemists within the shopping centre.

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 Riga Ltd and Thomas J. O'Connor 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 Riga Ltd and Thomas J. O'Connor does not offend against Section 4 (1) of the Competition Act 1991.

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 Riga Ltd and Thomas J. O'Connor in relation to the lease of the premises at Unit 10 Douglas Shopping Centre, Douglas, Co. Cork notified under Section 7 on 30 September 1992 (notification no. CA/289/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993