EMA Decision: Brexit Does Not Frustrate Commercial Property Lease13 Aug 2019
The largely anticipated decision in the case of Canary Wharf v The European Medicines Agency has now been given.
Judge Marcus Smith ruled in favour of the Canary Wharf Group and said that the EMA would have to honour their 25 year lease even if they are relocating to Amsterdam as a result of the UK’s departure from the European Union. The lease would not be frustrated.
The case involved an application by the Canary Wharf Group for a declaration that Brexit would not frustrate EMA’s lease. The EMA claimed that there its 25 year lease of offices in Canary Wharf would be frustrated as a result of Brexit and the key issue between the parties was over the question of whether Brexit was “foreseen” or “foreseeable” in 2011 when the EMA entered into a lease of the premises in Canary Wharf.
The case was widely publicised because of the vast implication of the decision on the property sector and the likelihood that other tenants would try and make the same arguments.
“The judgment will be welcome news to landlords up and down the country as well as the property sector generally. This was the first case which considered the commercial realities of the UK’s departure from the European Union. It appears for now the decision will not result in opening the floodgates with other tenants trying to use Brexit to end their leases of office space which would have been particularly damaging to landlords with large portfolios of commercial property”.
However, there is still a possibility of an appeal by the EMA which we are told is being considered.
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