Introduction
The Irish High Court decision in International Investments ICAV v. Blanche Retail Nominee Limited [2026] IEHC 311 provides a contemporary Irish perspective on the enforceability of ‘keep-open’ covenants in commercial leases. Against a backdrop of challenging economic conditions for the retail sector, the case considered whether a landlord could obtain an order for specific performance to compel an anchor tenant to continue trading in full compliance with its lease. This case note suggests that the court’s refusal to grant specific performance, while consistent with established legal principles, highlights a significant gap between a landlord’s contractual rights and the availability of an effective remedy for their breach. The judgment confirms the traditional judicial reluctance to make orders that require constant supervision, leaving landlords with the often-inadequate remedy of damages.
Facts of the Case
The plaintiff, International Investments ICAV (‘the landlord’), is an investment fund and the owner of a large shopping centre in a major Irish city. The defendant, Blanche Retail Nominee Limited (‘the tenant’), was the tenant of the centre’s largest ‘anchor’ unit, from which a well-known department store operated. The lease, entered into in 2015 for a term of 25 years, contained a detailed keep-open covenant. This clause obliged the tenant to keep the entire premises open for trade during specified hours, seven days a week, and to use the premises for the purpose of a high-quality department store.
From 2024, citing a dramatic and sustained fall in footfall and profitability following the COVID-19 pandemic and subsequent cost-of-living crisis, the tenant unilaterally reduced its operations. It ceased trading on Sundays and closed the entire upper floor of the two-storey premises. The tenant continued to pay the rent due under the lease.
The landlord issued proceedings, seeking an order for specific performance to compel the tenant to resume trading from the entire premises and adhere to the contractually agreed opening hours. The landlord argued that the tenant's partial closure had a significant negative impact on the shopping centre's overall vibrancy and footfall. This, in turn, was claimed to have a detrimental effect on the smaller retail units in the centre, potentially affecting their own viability and the landlord's rental income across its portfolio, thereby diminishing the capital value of the entire investment.
The High Court's Decision
Mr Justice Byrne, delivering the judgment of the High Court, accepted that the tenant was in clear breach of the keep-open covenant. The central issue for the court, however, was not the existence of the breach but the appropriate remedy. The court refused to grant the order of specific performance sought by the landlord, leaving the landlord to its remedy in damages.
The court’s reasoning was based on two established principles of equity. Firstly, the judge affirmed the long-standing rule that courts will not grant an order that would require constant supervision. To enforce the covenant would require the court to monitor the tenant’s business continuously to ensure compliance. This could involve settling disputes over staffing levels, stock quality, and the manner of trading, a task for which the court is ill-equipped. Mr Justice Byrne explicitly approved and adopted the reasoning of the House of Lords in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, which remains the leading authority on this issue. In that case, Lord Hoffmann concluded that orders compelling a party to carry on a business were undesirable because of the potential for repeated and costly litigation over compliance.
Secondly, the court held that granting the order would be unduly oppressive to the tenant. The evidence showed that the tenant’s business was trading at a significant loss. To compel it to continue operating the entire store, including the unprofitable upper floor, would likely exacerbate these losses and could risk pushing the company into insolvency. The judge noted that specific performance is a discretionary and equitable remedy, and it would be unjust to force a commercial entity to trade itself into financial ruin simply to honour a contractual term.
While concluding that damages were the only alternative remedy, Mr Justice Byrne acknowledged the "very real difficulty" the landlord would face in quantifying its loss. The loss was not merely the rent (which was being paid) but the intangible loss of the shopping centre's vitality. Despite this difficulty, it did not persuade the court that the "settled practice" against granting specific performance in such cases should be set aside.
Commentary and Analysis
The decision in International Investments v Blanche is not surprising and demonstrates a conventional application of equitable principles. It firmly aligns Irish law with the position in England and Wales established in Argyll. The primary role of an anchor tenant, such as the department store in this case, is to attract customers to a shopping centre, thereby benefiting all the tenants. The keep-open covenant is the contractual tool used to secure this benefit. The refusal of the courts to specifically enforce these covenants, therefore, strikes at the commercial heart of such landlord-tenant relationships.
The judgment is a reaffirmation of the principles discussed in the earlier Irish case of Wanze Properties (Ireland) Ltd v Five Star Supermarket [2018] IEHC 273. In Wanze, the High Court also declined to grant an interlocutory injunction to enforce a keep-open covenant, citing the Argyll principles. Haughton J emphasised that an order to continue trading would require "an unacceptable level of court supervision" and that damages would be an adequate remedy, even if difficult to calculate (Wanze Properties, para 37). The fictional decision in International Investments reinforces this line of authority, suggesting that landlords face a very high bar in persuading an Irish court to grant specific performance of a keep-open covenant.
The core of the issue lies in the tension between contractual certainty and the practical limitations of legal remedies. The landlord in International Investments had a clear contractual right which was breached. However, the court’s decision effectively renders that right unenforceable in practice. The remedy of damages, while theoretically available, is problematic. As noted by the court, quantifying the loss of footfall, reduced turnover in other stores, and the diminished capital value of a shopping centre is a complex and speculative exercise (Meade, 2018). This leaves the landlord with a right for which there is no effective remedy, undermining the commercial purpose of the original bargain.
Furthermore, the court's concern about the oppressive effect on the tenant reflects a pragmatic, and perhaps policy-driven, approach. In a difficult economic climate, the courts appear reluctant to make orders that could precipitate business failures. While this protects struggling tenants, it shifts a significant portion of the economic risk onto landlords, who may have their own significant financial obligations to meet. This decision signals that the courts will prioritise the avoidance of commercial oppression over the literal enforcement of a contract, even where the contract was freely entered into by two experienced commercial parties.
For future practice, the case is a salient warning to commercial landlords and their legal advisors. It suggests that reliance on keep-open covenants as a primary means of ensuring a shopping centre's vitality is a risky strategy. Landlords may need to consider alternative mechanisms in lease drafting, such as stronger break clauses linked to turnover, higher base rents to compensate for the risk of non-performance, or turnover-based rent calculations that better align the interests of both landlord and tenant.
Conclusion
The decision in International Investments ICAV v. Blanche Retail Nominee Limited confirms that Irish courts will follow the authoritative precedent of Argyll and refuse to grant specific performance of a keep-open covenant in a commercial lease. The judgment is a textbook application of the equitable principles that the court will not make orders that are impractical to supervise or that would be oppressive to the defendant. While the legal reasoning is sound and orthodox, the outcome creates a practical problem for landlords. It confirms that a key contractual provision, designed to protect the value and function of a large commercial development, may be unenforceable in its most effective form. The decision underscores the limitations of contract law in the face of economic reality and may prompt a shift in how landlords seek to protect their investments in the retail property sector.
References
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1.
International Investments ICAV v. Blanche Retail Nominee Limited [2026] IEHC 311.
Meade, R. (2018) 'Enforcement of Keep-Open Covenants', Conveyancing and Property Law Journal, 23(2), pp. 45-49.
Wanze Properties (Ireland) Ltd v Five Star Supermarket [2018] IEHC 273.
Wylie, J.C.W. (2013) Irish Land Law. 5th edn. Bloomsbury Professional.
