Tesco Have No Choice But To Accept Closure Of Hardware Store

Tesco Ireland’s application, for an interlocutory injunction requiring Choice Stores to keep their premises within a Tesco store in Waterford open for business (as per the keep-open clause contained in the Licence to Choice), was refused by Ms Justice Marguerite Bolger in the High Court on 1 May 2026.

Essentially, Choice Stores ran a Premises under licence from Tesco, but at a documented and continuing loss. They felt both that they could not sustain this continuing position, and that their reputation was being damaged due to other alleged shortcomings with the centre in which the premises was located.

While revisiting the leading cases on injunctive relief, specifically re keep open clauses (the UK House of Lords 1998 decision in the Argyll case; the Irish High Court determination almost in parallel by Costello P in Wanze Properties v Five Star/ Tesco Ireland); the Irish Supreme Court decision in Merck Sharp & Dohme; and finally the Irish High Court decision in Thomas Thompson Holdings v. Musgrave Group), Bolger J said that she was not satisfied that there was a strong chance that specific performance of the entire licence agreement would be granted at trial.

Her principal reason here seems to be that there should not (save in exceptional circumstances) be an injunction to require a loss-making business to continue to trade against their wishes. That was even though there appeared to be clear evidence that the defendant tenant was in clear breach of its licence and keep-open obligations, and that (at that stage in any event) its arguments that there was evidence to enable it to repudiate its licence agreement were rejected. In this case, the judge felt that damages would be adequate as a remedy, and furthermore there was no evidence before the Court that the landlord would be unable to honour its undertaking on damages, or that the tenant would be unable to honour an award of damages.

An argument made on behalf of Tesco, that a decision against it might become a damaging precedent “emboldening” its other licensees in the centre to similarly disregard their obligations and cease trading without consequence, did not persuade the judge, who felt that Tesco's worries in this regard would not stop it quantifying its losses in the same way as here. Similarly, the judge felt that the balance of convenience would not be served by compelling the defendant to continue to trade in a loss making business until the trial.

The rationale here, and its applicability to other cases, seems clear. It is not however, a ‘licence’ (sorry!) for tenants to believe that they can walk away from a loss-making unit (held under lease or licence) without consequence – an award for damages would still be open to an aggrieved landlord.

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