COMPETITION AUTHORITY

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

Notification No:  CA/338/92E ‑ Richfield Investments Ltd/The Governor and Company of the Bank of Ireland.

Decision No: 76

	

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Notification No.  CA/338/92E ‑ Richfield Investments Ltd/The Governor and Company of the Bank of Ireland.

Decision No:  76

Introduction

1.	Notification was made by the Governor and Company of the Bank of Ireland (Bank of Ireland) on 30 September, l992 with a request for a certificate under Section 4(4) of the Competition Act, l99l 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 Richfield Investments Ltd (Richfield) and the Bank of Ireland.

The Facts

(a)	Subject of the notification

2.	The notification concerns the leases of shop units 18, 19 and 20 in the Thomond Shopping Centre, Roxboro Road, Limerick, between Richfield as Landlord and the Bank of Ireland as tenant.

(b)	The parties

3.	The Bank of Ireland is the second largest commercial bank in the State with a network of 290 branches including the branch at Thomond Shopping Centre. Richfield is the landlord and owner of the Thomond Shopping Centre.

(c)	The notified arrangements

4.	The notified lease in respect of units 19 and 20 was executed on 4 December 1980 for a term of 999 years from 1 November 1980. The restricted user clauses in this lease are as follows:‑

(a)	Under clause C 13 (a) the tenant covenants "Not to assign, sub‑let, part with or share possession or occupation of the demised premises or any part thereof .... without the consent in writing of the Landlord first obtained."

(b)	Under clause C 11 the tenant covenants "To use the demised premises only for the carrying on of the trade, provision of the services or sale by retail of the goods set out in the Fourth Schedule hereto and not without the Landlord's consent in writing to use or permit or suffer the same or any part thereof to be used for the carrying on of any other trade, provision of any other service or the sale of any other goods or for any other purpose whatsoever......"

(c)	Under clause 6 of the First Part to the Second Schedule "The Landlord hereby agrees not to allow any other unit or part of the Centre to be used as a Commercial Bank."

5.	The notified lease in relation to Unit 18 was executed on 27 May, l992 for a term of 999 years from 1 October, l99l.  The restricted user clauses in this lease are as follows:

(a)	Under clause C(9) the tenant covenants with the landlord:

	"To use the demised premises only for the carrying on of the trade, provision of the services or sale by retail of the goods set out in the Fourth Schedule hereto ......."  

(b)	Under clause C(13)(a) the tenant covenants with the landlord

	"Not to assign, sub‑let, part with or share possession or occupation of the demised premises or any part thereof or suffer any person to occupy or use the demised premises or any part thereof as Licensee without the consent in writing of the Landlord being first obtained."

(c)	Clause 6 to First Part of the Second Schedule reads

	 "The Landlord hereby agrees not to allow any other unit or part of the Centre to be used as a Commercial Bank."

(d)	In the Fourth Schedule, the Limitation of user clause reads

	"The premises shall be used as a Commercial Bank premises and for banking related and associated Services and Businesses only, and the Landlord hereby agrees not to allow any other unit or part of the Centre to be used as a Commercial Bank."

6.	In addition, there are a number of other standard restrictive covenants and obligations in both leases.

Assessment ‑ The Applicability of Section 4(1)

7.	The Authority considers that the Bank of Ireland and Richfield Investments Ltd are undertakings and that the notified lease is a agreement between undertakings.  The agreement has effect within the State.

8.	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 of 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 Richfield Investments Limited and the Bank of Ireland do not offend against Section 4(1) of the Competition Act, l99l.

The Certificate

9.	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  Richfield Investments Limited and the Governor and Company of the Bank of Ireland in relation to the lease of the premises at Thomond Shopping Centre, notified under Section 7 on 30 September 1992 (notification no. CA/338/92E), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall
Member
5 October 1993