COMPETITION AUTHORITY

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

Notification No:  CA/324/92E ‑ Townparks Ltd/The Governor and Company of the Bank of Ireland.

Decision No: 67

							

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Notification No. CA/324/92E ‑ Townparks Ltd/The Governor and Company of the Bank of Ireland

Decision No. 67

Introduction

1.	Notification was made by The Governor and Company of the Bank of Ireland (Bank of Ireland) 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 Townparks Ltd and Bank of Ireland.

The Facts

(a)	The subject of the notification

2.	The notification concerns the lease of shop units, 21 and 22 at Galway Shopping Centre, Headford Rd. Galway between Townparks Ltd as lessor and the Bank of Ireland as lessee. 

(b) The parties involved

3.	The Bank of Ireland is the second largest commercial bank in the State with a network of 290 branches including the branch located at the Galway Shopping Centre.  Townparks Ltd is engaged in the business of letting units and managing a shopping centre. 

(c) The notified arrangements

4.	The notified shop lease was executed on 10 April 1973 for a term of 35 years from 1 September 1972. The restricted user clauses in the lease are as follows:‑

(a)	Under clause 12 the lessee covenants

 ".......not to use or suffer to be used the premises or any part thereof for any purpose other than a commercial bank, without the consent of the lessor under its seal first obtained." 

(b)	Under clause 15 the lessor covenants

"not to assign charge or under‑let or share or part with the possession of the premises or any part thereof or otherwise alienate same without the previous written consent of the Lessor such consent not to be unreasonably withheld."

(c)	By way of letter dated 17 April 1972 the Lessor indicated that all other leases related to the shopping centre had the restriction

"not to use or permit the premises hereby demised to be used for a bank."

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 the Bank of Ireland and Townparks Ltd 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 Townparks Ltd and the Bank of Ireland 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 Townparks Ltd and the Governor and Company of the Bank of Ireland in relation to the lease of the premises at 21/22 Galway Shopping Centre, Headfort Rd., Galway notified under Section 7 on 30 September 1992 (notification no. CA/324/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
5 October 1993