COMPETITION AUTHORITY

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

Notification No:  CA/947/92E ‑ Superquinn/Tenants at Superquinn Shopping Centre, Knocklyon.

Decision No: 55

									Price  £0.30
								   	           £0.70 incl. postage.

Notification No. CA/947/92E ‑ Superquinn/Tenants at Superquinn Shopping Centre, Knocklyon.

Decision No.  55

Introduction

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 units at Superquinn Shopping Centre, Knocklyon, Dublin 16

The Facts

(a)	The subject of the notification

2.	The notification concerns the leases of shop units at Superquinn Shopping Centre, Knocklyon, Dublin 16, between Superquinn as lessor and 12 separate tenants.

(b)	The parties involved

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

(c)	The notified arrangements

4.	The sample shopping centre lease notified related to Unit 7  and was executed on 24 February 1989 for a term of 22 years from 24 November 1988 between Superquinn Ltd as lessor and John O'Connor as lessee.  The restricted user clauses in this lease are as follows:‑

(a)	Under clause B.15 the lessee covenants "....not without the prior consent in writing of the lessor.....to use or permit or suffer or allow the demised premises or any part or parts thereof to be used for any purpose other than that specified in the Fifth Schedule hereto........"

The Fifth Schedule reads under the heading "User" "As a shop for the repair of shoes and for key cutting."

(b)	Under clause B.18 the tenant covenants 
	"(a)	Not to assign, underlet or part with or share the possession or occupation of any part of the demised premises .......under any circumstances whatsoever.

	(b)	Not to assign, underlet or part with or share the possession or occupation of the whole of the demised premises 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 lease.

5.	Superquin has indicated that similar obligations attach to the leases on each of the other tenancies with restricted user clauses confining each tenant to specified trading or service activities. They have also advised that Lessor covenants not to permit similar activities at the Centre (excluding the supermarket units) have been provided in relation to each of the lessees of units 8, 9, 10, 12 and 13.

Assessment ‑ The applicability of Section 4 (1)

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 sample agreement notified,  and its restricted and exclusive user clauses, and its 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 agreements between Superquinn and its tenants do not offend against Section 4 (1) of the Competition Act 1991.

The Certificate

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, Knocklyon, Dublin 16 notified under Section 7 on 30 September 1992 (notification no. CA/947/92E), do not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
5 October 1993