COMPETITION AUTHORITY

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

Notification No:  CA/215/92E ‑ Max Developments Ltd/Pride and Joy Ltd.

Decision No: 39

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Notification No. CA/215/92E ‑ Max Developments Ltd/Pride and Joy Ltd         

Decision No.  39

Introduction

1.	Notification was made by Pride and Joy 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 a lease between Max Developments Ltd and Pride and Joy Ltd.

The Facts

(a)	The subject of the notification

2.	The notification concerns the lease of a shop unit, Unit 20, Donaghmede Shopping Centre, Donaghmede, Dublin 13 between Max Developments Ltd as landlord and Pride and Joy Ltd as tenant.

(b)	The parties involved

3.	Max Developments Ltd the present Landlord is engaged in the letting of shop units at Donaghmede Shopping Centre. Pride and Joy Ltd which purchased the tenant interest in unit 20 in 1976 is engaged in the business of retailing jewellery and watch repairing at unit 20.

(c)	The notified arrangements

4.	The notified shopping centre lease was executed on 26  September 1973 for a term of 35 years from 1 April 1973. The restricted user clauses in the lease are as follows:

(a)	Under clause c(12) 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 to 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 whatever....."

The Fourth Schedule under the heading"Limitation of user clause" reads

"The premises are to be used as a jewellers shop and watch and clock repair shop only."

(b)	Under clause c(14)(a) the tenant covenants with the landlord

 "Not to assign, sublet, 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."

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 Max Developments Ltd and Pride and Joy 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 Max Developments Ltd and Pride and Joy Ltd 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 Max Developments Ltd and Pride and Joy Ltd in relation to the lease of the premises at Unit 20 Donaghmede Shopping Centre, Donaghmede, Dublin 13 notified under Section 7 on 30 September, 1992 (notification no. CA/215/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
5 October 1993.