Shell Licence [1994] IECA 327 (19th May, 1994)

Shell Licence [1994] IECA 327 (19th May, 1994)

The standard Shell licensee agreement, as amended, creates a commercial agency relationship for the sale of motor fuels, with the licensee acting as an auxiliary organ of Shell and not as an independent trader. The agreement, as amended to limit Shell's power to require removal of shop products to objectively valid reasons, does not have as its object or effect the prevention, restriction or distortion of competition under Section 4(1) of the Competition Act, 1991.

Citation
[1994] IECA 327
Parties
Applicant: Irish Shell Ltd; Decision Maker: Competition Authority
Jurisdiction
Ireland
Procedural Posture
Competition Law Notification/decision / Decision on Notification for Certificate Under Section 4 of the Competition Act, 1991
Outcome
Certificate granted; agreement does not offend Section 4(1) of the Competition Act, 1991.
Legal Topics
Agency Agreements, Commercial Agency, Exclusive Dealing, Restraint of Trade, Market Definition, Retail Distribution, Section 4 Competition Act 1991
Competition Law Agency Agreements Commercial Agency Exclusive Dealing Restraint of Trade Market Definition Retail Distribution Section 4 Competition Act 1991

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Parties

Irish Shell Ltd

Applicant

Competition Authority

Decision Maker

Procedural Posture

Competition Law Notification/decision / Decision on Notification for Certificate Under Section 4 of the Competition Act, 1991

Legal Issues

  1. 1 Whether the standard licence agreement between Shell and its licensees for operation of Shell-owned petrol stations and shops constitutes an agreement between undertakings that has as its object or effect the prevention, restriction or distortion of competition under Section 4(1) of the Competition Act, 1991.
  2. 2 Whether the licensee is a commercial agent or an independent trader for the purposes of competition law.
  3. 3 Whether specific clauses in the agreement, particularly relating to the shop, restrict competition.

Ratio Decidendi

The standard Shell licensee agreement, as amended, creates a commercial agency relationship for the sale of motor fuels, with the licensee acting as an auxiliary organ of Shell and not as an independent trader. The agreement, as amended to limit Shell's power to require removal of shop products to objectively valid reasons, does not have as its object or effect the prevention, restriction or distortion of competition under Section 4(1) of the Competition Act, 1991.

Court Disposition

Certificate granted; agreement does not offend Section 4(1) of the Competition Act, 1991.

Orders

  • The Competition Authority certifies that the standard agreement between Irish Shell Ltd and its licensees for the operation of a Shell-owned petrol station and shop, as amended by Shell's letter of 1 March 1994, does not offend against Section 4(1) of the Competition Act, 1991.