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Important Brexit decision

Decision

In a highly anticipated decision, the High Court has ruled in the case of Canary Wharf (BP4) T1 Limited and others v European Medicines Agency that the European Medicines Agency (“EMA”) cannot terminate its lease of premises at Canary Wharf due to Brexit.

EMA argued that the lease had been frustrated due to Brexit. For an agreement to be legally frustrated there must be an unforeseen event or change in circumstances which makes the agreement impossible to fulfil.

Mr Justice Marcus Smith said: "The lease will not be discharged by frustration on the United Kingdom's transition from member state of the European Union to a 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."

Commentary

Whilst this is unarguably an important property law decision, the key point of the decision, that Brexit does not frustrate an agreement or release a party from their obligations thereunder, is likely to be applied in a wider context, for example in respect of general contract law.

Michelle Goodrum
February 2019