Canary Wharf wins High Court battle against EU agency’s lease

Mr Justice Marcus Smith found comprehensively in CGW’s favour, rejecting the EMA's case that their 25-year lease of premises in Canary Wharf would be legally 'frustrated' as a result of Brexit.

The judgement stated: 'The lease will not be discharged by frustration on the United Kingdom's transition from member state of the European Union to third country nor does the EMA's shift of headquarters from London to Amsterdam constitute a frustrating event. The EMA remains obliged to perform its obligations under the lease'.

The judge also ruled that on the EMA's case any frustration would have been self-induced, because it was the EU regulation passed in November 2018 that required its relocation from London.

The property industry has been waiting avidly for the judgement because the EMA's argument could have had much wider implications opening the door similar claims of 'legal frustration' because of Brexit.

Ben Hatton, director of property litigation at law firm Clifford Chance who led the team in representing Clifford Chance, said: 'We are pleased to secure this victory for Canary Wharf Group. The judge has ruled that Brexit does not amount to an event of frustration of the EMA's lease and this result will be welcome news in the property and legal market, bringing greater certainty as to the impact of Brexit on contracts.'

The EMA signed a £13 mln a year lease with landlords CWG in 2014 at 25-30 Churchill Place in Canary Wharf. The lease will now run to 2039 with no break clause.

The case brought by CWG against its tenant the EMA hinged on the rarely used legal doctrine of 'frustration'. CWG argued that EMA’s claim caused 'commercial uncertainty' for the financial district owners and its lenders and wanted a legal ruling on the matter.

EMA may be able to pursue other options such as sub-letting to a third party. WeWork is reportedly in talks to take on EMA’s Churchill Place lease.