The European Medicines Agency (EMA) has failed in a High Court bid to have its £500m Canary Wharf lease cancelled due to Brexit.  The court ruling will be welcomed by landlords who feared that other tenants would try to use Brexit as an excuse to terminate their leases.

The EMA signed a 25-year lease for its ten-storey headquarters in London’s Canary Wharf in 2011.  After the Brexit referendum, the Agency relocated to Amsterdam as it would be illegal for it to be based in a non-EU country following the UK’s exit.

The Agency tried to cancel the lease but was taken to court by its landlord, Canary Wharf Group, which wanted it enforced.  The EMA argued that the contact was ‘frustrated’ by the Brexit decision – a legal term meaning that unforeseen circumstances made a contract unjust for both sides to fulfil.

The judge ruled in favour of the Landlord.  He concluded that the contract would not be frustrated by the UK leaving the EU and that the EMA was obliged to perform its obligations under the lease.

There are firms that are moving operations to Europe in response to Brexit,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “Landlords were fearful that they would try to avoid their UK leases as a result, but this High Court ruling will give them comfort that the leases will stand.  But the risk remains that the EMA will take its case to the European Courts for a further ruling.  We’ll have to wait and see for the final outcome.

Reports on the cases have been published by Wright Hassall, The Guardian and IPE Real Assets.

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