The European Medicines Agency (EMA), which moved to Amsterdam in the wake of Brexit, has lost a high court battle to cancel its £500 million long-term office lease in London.
The company officially made the move in January 2019, leaving some of its 900 staff behind in London.
It entered the court case on the basis that the lease on its Canary Wharf HQ had been “frustrated” by Britain’s impending departure from the EU, a legal term meaning that owing to an unforeseen event, the basis on which the contract was signed had changed, making it impossible to fulfil.
Canary Wharf Group, the building’s landlord, ultimately won the right to enforce the contract which lasts until 2039.
The landmark ruling has prompted lawyers to say that it could stave off similar such claims by other tenants, stopping a wave of copycat lease cancellations from banks and other companies forced to move some or all operations to an EU member state because of Brexit.
Commenting on the implications of the case, Paul Tonkin, real estate disputes partner at Hogan Lovells - a leading global law firm providing business-oriented legal advice - said: "Ultimately, the arguments turned on the very bespoke characteristics of the EMA as a European institution and the prospect of a wider risk of commercial tenants seeking to argue that Brexit is a frustrating (in the legal sense!) event has always seemed wide of the mark.
"However, the Court's decision reaffirms the very high threshold required to establish frustration and ought to lay to rest any residual concerns on that front.”
The EMA said it would take some time to study the implications of the decision. While it respected the high court ruling, it reiterated its initial claim that it had “no choice” but to leave London because of Brexit.