The court has decided in the landlord’s favour and rejected the European Medicines Agency’s argument that its Canary Wharf lease had been frustrated by Brexit. As previously discussed here, the EMA had argued that by being forced to relocate to an EU located HQ as a result of Brexit (Amsterdam being the lucky venue chosen), it could not perform the terms of the lease and the lease should therefore automatically cease.
The EMA must therefore honour the terms of their lease. With the landlord stating in court that a decision against them would mean they immediately lost £264m, we can only imagine the celebrations at the landlord’s offices (and the anxious faces at the EMA). Unless the EMA can agree a surrender with the landlord, it must now find an assignee or sub-tenant willing to take on the property. Given that it had argued in court the building had been specifically designed for its purposes, this may prove to be a difficult task.
In truth this was a speculative argument raised by the EMA, frustration is a rarely used means of getting out of a lease or contractual obligation and for very good reason – parties have to go into a lease or contract in the expectation that its terms will be honoured and not terminated by external factors.
With such a substantial liability on the line an appeal seems likely.