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Competition Law And Restrictive Covenants

18th July, 2014

Last year saw the first reported case where a restrictive covenant affecting user was defeated by the provisions of competition law.

The case arose in the context of a lease renewal. The landlord failed to persuade the judge that the exemptions to the competition regime applied here. The market was tightly defined as being more or less the retail parade itself despite other relevant stores being available within a 1.5 km range.

Commentators have pointed to the fact that the County Court may not have been the most appropriate forum to hear such cases. Competition issues should be dealt with by the Chancery Division of the High Court. Also, the decision was made without a full hearing using limited evidence.

The impact of this case is one to monitor in the future.

For more information please contact Emma McGlinchey on 01244 405567 or  email [email protected].

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