Notification No: CA/339/92E ‑ Drakebury Construction Ltd/ Governor and Company of the Bank of Ireland

Decision No.  233

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 Drakebury Construction Ltd and the Bank of Ireland.

The Facts

(a)	Subject of the Notification

2.	The notification concerns the lease of unit 126 in the Eyre Square Centre, Galway City between Drakebury Construction Ltd as landlord and the Bank of Ireland as tenant.

(b)	The Parties Involved

3.	Drakebury Construction Ltd is the freeholder and original landlord of the Eyre Square Centre, Galway.  The Bank of Ireland is the second largest commercial bank in the State with a country wide network of 290 branch offices.

(c)	The Notified Arrangements

4.	The notified lease was made on 13 March, 1991 for a term of 999 years.  The restricted user clauses in the lease are as follows:

(a)	Under clause 4.11.2 the tenant covenants with the landlord "Not without the prior consent in writing of the Landlord or its Agent thereunto lawfully authorised to use or to permit or suffer or allow the Demised Premises or any part or parts thereof to be used for any purpose other than for the Permitted Business and for no other purpose or purposes whatsoever....PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant or any authorised under‑tenant or the Tenant for liberty to alter or change the Permitted Business the Landlord shall not unreasonably withhold its consent to such proposed change of user..."

(b)	Under clause 1 Permitted Business is defined as "in relation to the Demised Premises generally the business of provision of financial services in general including (but without prejudice to the generality of the foregoing) banking, building society, investment, financial dealing and consultancy, money dealing, provision and use at all times and for all purposes of Automatic Teller Machines, hire purchase leasing, discounting, dealing in exchange and securities and any other business normally carried on or ancillary to banking but in relation to the part of the Demised Premises more particularly described and delineated on Plan B annexed hereto and thereon coloured yellow  only the provision and use at all times and for all purposes of an automatic teller machine.

(c)	Under clause 4.25.1 the tenant covenants with the landlord "Not to assign, transfer, underlet or part with the possession or occupation of the Demised Premises or any part thereof without first notifying the Landlord and procuring that the assignee or sub‑lessee shall enter into a direct covenant with the Landlord to perform and observe the covenants and conditions on the Tenant's part contained in this Lease".

d)	Under clause 5.6 the landlord covenants with the tenant "Not for the period commencing on the Term Commencement Date and expiring ten years after the date of issue of the Certificate of Practical Completion under the Development Agreement, to instal or operate or permit or suffer or allow to be installed or operated by any person, other than the Tenant, an Automatic Teller Machine in (or fronting onto) the Malls at Levels One and Two within the Centre or in any lobby adjacent to the Malls BUT EXCLUDING any Automatic Teller Machine located in a store or lobby not designed exclusively for the use of an Automatic Teller Machine lobby".

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 Drakebury Construction Ltd and the Bank of Ireland 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 of 10 September, 1993, pp. 665‑667).  The Authority therefore considers that the notified agreement between Drakebury Construction 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 Drakebury Construction Limited and the Governor and Company of the Bank of Ireland in relation to the lease of the premises at Eyre Square Centre, Galway, notified under Section 7 on 30 September, 1992 (notification no. CA/339/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall
Member
15 December 1993