Irish Competition Authority Decisions

1. Notification was made by Peter Mark 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 a lease between Douglas Developments Ltd and Peter Mark.

2. The notification concerns the lease of a shop unit, Unit 15, at Douglas Court Shopping Centre, Douglas, Co. Cork between Douglas Developments Ltd as landlord and Peter Mark as tenant.

3. Douglas Developments Ltd is engaged in the business of letting shop units at Douglas Court Shopping Centre. Peter Mark is an unlimited company carrying on the business of hairdressing with approximately 48 outlets in the State.

4. The notified shopping centre lease was executed on 8 March 1990 for a period of 35 years from 12 March 1990. The restricted user clauses in the lease are as follows:

(a) Under clause 3.28 of the agreement the tenant covenants

"Not without the prior consent in writing of the Landlord ..... 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 for a retail shop for the permitted purposes as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever......

Part II of the First Schedule under the heading"Permitted User" reads "Hair and Beauty Salon including sun ray treatment, a solarium and the sale of fashion in relation only to hair and beauty treatment and the landlord hereby undertakes with the Tenant that the Tenant shall have the exclusive right within the Centre for 7 years and 6 months from the commencement date to use the Demised Unit for ladies haircare and beauty treatment ......."

(b) Under clause 3.26 the tenant covenants with the landlord

"Not, without first obtaining the consent in writing of the Landlord, to assign, transfer, underlet, charge, mortgage, encumber, hold on trust for another or part with the possession or occupation of the Demised Unit or any part thereof or suffer any person to occupy the Demised Unit or any part thereof as licensee or concessionaire and in no circumstance or event to an assignee who would carry on any business of a non-retail nature BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall subject to sub-Clause 6.4 hereof not unreasonably withhold its consent ...........

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

5. The Authority considers that Douglas Developments Ltd and Peter Mark 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 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 Douglas Developments and Peter Mark does not offend against Section 4 (1) of the Competition Act 1991.

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 Douglas Developments Ltd and Peter Mark in relation to the lease of the premises at Unit 15 Douglas Court Shopping Centre, Douglas, Co. Cork notified under Section 7 on 30 September 1992 (notification no. CA/1019/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993