Co-op fined for failing to 'Keep Open'

Anchor tenants in Scottish shopping centres could be forced to keep trading even if they are making a loss, following a landmark ruling by a Court of Session in Edinburgh. The Court found in favour of the landlord of Dundee's Whitfield Shopping Centre after its anchor tenant, the Co-op, sublet its unit to Kwik Save, which then closed its store in the scheme.

The judge, Lord Reed, stated that under a 'Keep Open' clause, which formed part of the condition of the long lease entered into by the Co-op, the retailer was in breach of its tenancy and that the Whitfield Centre had consequently suffered a material loss. He awarded Douglas Shelf Seven, landlord of the Whitfield Shopping Centre,£600,000 in damages.

McClure Naismith commercial lawyer Lynne Cardow, who advised Douglas Shelf Seven, said: ' This is a ground-breaking judgment with major implications for Scotland's retail sector. Landlords and tenants will now be more aware of the importance of a Keep Open clause in a lease and the potential consequences for tenants of breaching such an obligation. This could open the floodgates for similar actions to be brought forward.'