The Supreme Court of Appeal has upheld the validity of the restraint that effectively prevented Woolworths and Mica from becoming tenants in Bedford Centre in the matter involving Bedford Square Properties.

The decision was made on the basis that the restriction related only to the particular properties subject to the agreed restriction, and nothing prevented the owner of the properties from letting premises to Woolworths and Mica elsewhere, or to let to other tenants with similar business activities.

In its judgment, the court noted: "The restraint was agreed to by parties with equal bargaining power.

That it was limited to these two properties; that it was limited to these two particular retailers and not all the others that provide the same or similar services; that the restraint was limited to 11 years; that the protection of anchor tenants (as found by the court a quo...) was 'a legitimate part of commercial life in this country'."

As an aside, the court commented on the fact that issues of competition were the preserve of the competition authorities under the Competition Act of 1998 and said.

"This means that the question whether the restraint may have been in conflict with the Competition Act cannot feature in this judgment, one of the consequences of compartmentalising legal doctrines of divided jurisdiction.

It cannot do the rule of law any good if different results may follow depending on which court system has to deal with the matter."

Source: I-Net Bridge