North West property developer, High Peak Developments, has launched a legal battle against Tesco, claiming that the supermarket giant is breaching competition law in the Peak District.
The Derbyshire store under fire currently holds a restrictive covenant, which enables the retail giant to control how the land surrounding its Whaley Bridge store can be used.
Restrictive covenants are commonplace in the grocery sector, issued primarily to prevent retail competitors from setting up on nearby plots, but High Peak Developments says that Tesco’s refusal to release the covenant affecting the land adjacent to its supermarket, breaches the Competition Act of 1998.
Tesco originally bought the land to build its Whaley Bridge store in 1997, and has relied on the covenant ever since to ensure that its nearby surroundings are not used for future sale of food, convenience goods or pharmacy products.
However, High Peak Development – who have entered into a conditional agreement with a discount retailer to build on the site, should the restrictive covenant be released – is seeking a declaration that the covenant is void and unenforceable.
In July last year, the discount retailer in question committed to a long term lease, assuming that the abolition of Tesco’s covenant is fulfilled.
In light of this, High Peak are also seeking damages for the losses incurred as a result of their inability to develop their discount supermarket earlier due to the covenant’s existence.
A spokesperson for Tesco said: “We have been in commercial negotiations about a site next to our Whaley Bridge Superstore and remain willing to continue these negotiations to reach a mutually acceptable agreement.”
However, High Peak formally issued legal proceedings this week, claiming that negotiations with Tesco have for too long been unsuccessful.