UK Supreme Court: Restrictive covenant does not engage doctrine of restraint of trade – Irish Legal News

UK Supreme Court Credit: UK Supreme Court

The UK Supreme Court has ruled that a restrictive covenant given by the developer of a Derry shopping centre in a lease that it granted to Dunnes Stores over part of the centre does not engage the doctrine of restraint of trade.

Delivering the lead judgment, Lord Wilson overturned the findings of the Court of Appeal of Northern Ireland, which had held that the covenant engages the doctrine, is unreasonable and is therefore unenforceable.

Background

The respondent, Peninsula Securities Ltd, is a property holding company. Its managing director is Patrick Shortall, who owns 99 of the 100 shares – his wife owning the remaining share.

Mr Shortall wished to develop a shopping centre on land that he owned in Derry. He wanted an “anchor tenant” there in order to attract other retailers, and so he granted a lease

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