Comment from James Souter, Partner on the EMA Canary Wharf Case Judgment
You could almost hear the property market’s collective sigh of relief at today’s Judgment.
The uncertainty posed by Brexit is already causing concern to businesses across the country. If the Court had found that Brexit could be used to enable tenants to walk away from their leases, it could have led to chaos in the property market. Yet in this case, given the high stakes, the Judge took an extremely practical approach, and found that the EMA could legally continue to operate out of London, in spite of Brexit.
The background to the Judgment is also enlightening. The EMA had not established any further legal protections against such ‘seismic changes’. In truth, its lease was something of a bad bargain. Without any flexibility – such as a standard lease break – the EMA found itself backed into a corner, unable to protect its commercial interests.