Kantoher Food Products Ltd/Carton Brothers Ltd [1994] IECA 352 (7th September, 1994)

Kantoher Food Products Ltd/Carton Brothers Ltd [1994] IECA 352 (7th September, 1994)

The non-compete clause in the agreement was not justified as Cartons had already acquired the goodwill prior to the agreement, the restriction was excessive in duration and timing, and technical know-how considerations did not apply. The agreement was not intra-group at the relevant time. Therefore, the restriction offends Section 4(1) and does not qualify for a licence under Section 4(2).

Citation
[1994] IECA 352
Parties
Vendor: Kantoher Food Products Limited; Purchaser: Carton Brothers (Processing) Limited; Related Party: Carton Brothers Limited; Former Manager/purchaser of Shares: Donal Flynn; Former Parent of KFP: Kantoher Co-Operative Agriculture and Dairy Society Limited; Acquirer of KFP Assets: Kerry/Grove Group; Plaintiff in Related Litigation: Grove Turkeys Limited
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification/decision / Final Decision on Notification for Certificate or Licence
Outcome
Refusal to issue certificate or grant licence
Legal Topics
Non Compete Clauses, Sale of Business, Section 4 Competition Act 1991, Market Concentration, Goodwill Transfer
Competition Law Non Compete Clauses Sale of Business Section 4 Competition Act 1991 Market Concentration Goodwill Transfer

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Parties

Kantoher Food Products Limited

Vendor

Carton Brothers (Processing) Limited

Purchaser

Carton Brothers Limited

Related Party

Donal Flynn

Former Manager/purchaser of Shares

Kantoher Co-Operative Agriculture and Dairy Society Limited

Former Parent of KFP

Kerry/Grove Group

Acquirer of KFP Assets

Grove Turkeys Limited

Plaintiff in Related Litigation

Procedural Posture

Competition Authority Notification/decision / Final Decision on Notification for Certificate or Licence

Legal Issues

  1. 1 Whether the non-compete clause in the sale agreement offends Section 4(1) of the Competition Act 1991
  2. 2 Whether the agreement qualifies for a certificate or licence under Section 4(2)

Ratio Decidendi

The non-compete clause in the agreement was not justified as Cartons had already acquired the goodwill prior to the agreement, the restriction was excessive in duration and timing, and technical know-how considerations did not apply. The agreement was not intra-group at the relevant time. Therefore, the restriction offends Section 4(1) and does not qualify for a licence under Section 4(2).

Court Disposition

Refusal to issue certificate or grant licence

Orders

  • Refusal to issue certificate under Section 4(1) Competition Act 1991
  • Refusal to grant licence under Section 4(2) Competition Act 1991