Irish Competition Authority Decisions

1. Notification was made by Stateline Enterprises Ltd 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 Cartron Vilage Management Co. Ltd and Stateline Enterprises Ltd.

2. The notification concerns the leases on shop units No. 1 and 4 at Cartron Village Centre, Cartron, Sligo between Cartron Village Management Co. Ltd as Lessor and Stateline Enterprises Ltd as lessee.

3. Cartron Village Management Company Ltd is engaged in the business of letting shop units at the shopping centre at Cartron Village. Stateline Enterprises Ltd trades as a grocer at Unit 1 and as newsagents at Unit 4 at Cartron Village.

4. (i) The notified shopping centre lease in relation to Unit 4 was executed on 8 May 1984 for a period of 999 years from 1 January 1984. The restricted user clauses in the agreement are as follows:-

Under clause 13 the lessee covenants

"....not to use or suffer to be used the said premises or any part thereof for any purpose other than as a Newsagency and not to exhibit or sell or deal in any way with any goods or articles of any other description except those used for the purpose of a Newsagency PROVIDED however that the Lessee will have the right to sell light confectionery, gifts, novelties, light medical supplies, Ice Cream.....and other products ancillary to or normally associated with business of a Newsagency and not sold elsewhere within the Shopping Centre (unless with the prior written consent of the Lessor such consent not to be unreasonably withheld)"

Under clause 19 the tenant covenants

"Not to assign (other than by way of Mortgage) or under-let or share or part with the possession of the said premises or any part thereof or otherwise alienate same without the previous written consent of the Lessor such consent not to be unreasonably withheld."

(ii) The notified Shopping Centre lease in relation to Unit 1 was executed on 5 February 1985 for a term of 999 years from 1 May 1984. The restricted user clauses in the lease are as follows:-

Under clause 1.13.2 the tenant covenants

"...not to use or suffer to be used the said premises or any part thereof for any purpose other than as a grocery retail outlet and not to ...sell ...any goods or articles....except those commonly connected with such business without the written consent of the lessor...

Under clause 3.8 the lessor covenants that

" the lessor shall not without the prior consent in writing of the lessee use or permit to be used any of the other Units or parts of the Shopping Centre for the purpose of a Grocery Retail Outlet."

Clause 1.19 which restricts the assigning by the lessee of the premises is similar to clause 19 at para. 4.1 above.

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

5. The Authority considers that Cartron Village Management Co. Ltd and Stateline Enterprises Ltd are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

6. 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 10 September 1993, pp. 665-667). The Authority therefore considers that the notified agreements between Cartron Village Management Co. Ltd and Stateline Enterprises Ltd do 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 agreements between Cartron Village Management Co. Ltd and Stateline Enterprises Ltd. in relation to the leases of the shop units 1 and 4 at Cartron Village shopping centre, Cartron, Sligo notified under Section 7 on 30 September 1992 (notification no. CA/341/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993