Irish Competition Authority Decisions

1. Notification was made by Superquinn on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991, or in the event of refusal by the Competition Authority to issue a certificate, a licence under Section 4(2) in respect of leases between Superquinn and the tenants of shop units at Superquinn Shopping Centre, Swords, Co. Dublin.

2. The notification concerns the leases of shop units at Superquinn Shopping Centre, Swords, between Superquinn as lessor and 8 lessees.

3. Superquinn are involved in the business of trading as a supermarket and in the letting of shop units at shopping centres. The tenants are involved in the various retail and service activities at the shopping centre.

4. The sample lease submitted in draft form was for a period of 35 years from 1 December 1986 with Superquinn Ltd as the Lessor. The restricted user clauses in this lease are as follows:-

(a) Under clause B.13 the tenant covenants

"Not without the prior consent in writing of the Lessor.....to use or permit or suffer or allow the Demised Unit or any part or parts thereof to be used for any purpose other than that specified in the Fifth Schedule hereto and for no other purpose or purposes whatsoever............"

It is also indicated that similar permitted user restrictions would be inserted in all leases relating to the centre to ensure diversity of businesses at the centre.

(b) Under clause B.46 the tenant covenants

"(a) Not to assign, underlet or part with or share the possession or occupation of any part of the Demised Unit........under any circumstances whatsoever.

(b) Not to assign, underlet or part with or share the possession of the whole of the Demised Unit except to a suitable and solvent party and subject to the written consent of the Lessor.........."

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

5. The applicant has indicated that similar requirements attach to each of the tenancies with the permitted user clause B.13 confining each tenant to particular specified trading activities.

6. The Authority considers that Superquinn and the tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. The Authority considers that the notified agreements, and their restricted and exclusive user clauses, and their 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 Superquinn and its tenants do not offend against Section 4 (1) of the Competition Act 1991.

8. 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 Superquinn and the tenants in relation to the lease of shop units at Superquinn Shopping Centre, Swords,, Co. Dublin notified under Section 7 on 30 September 1992 (notification no. CA/889/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

13 October 1993