The European Medicines Agency’s appeal in its clash with landlord Canary Wharf Group, over the impact of Brexit on its £13m-a-year lease, may not be heard for close to a year.
The Court of Appeal has tentatively listed the appeal to be heard “by 16 March 2020”, meaning it is unlikely to be heard this year.
High Court judge Mr Justice Marcus Smith had expedited the case at first instance in order that he could give his ruling prior to the initial anticipated date the UK would leave the EU, 29 March 2019. That deadline has now been delayed until 31 October 2019, but it does not appear that the Court of Appeal will fast-track the appeal to be heard by that date.
In granting the EMA permission to appeal, the High Court judge said that the case has “significant ramifications, not simply in terms of the effect of the withdrawal of the United Kingdom from the European Union on contracts… but also in terms of how one approaches the question of frustration in the context of detailed and commercially sophisticated leases”.
He added: “It seems to me that even if it were not a case concerning the withdrawal of the United Kingdom from the European Union, this would nevertheless be a case of wide-ranging importance. I also consider that an appeal would have a real prospect of success.”
In February, the judge ruled in favour of Canary Wharf Group, after a near 10-day long trial, that Brexit would not “frustrate” the EMA’s £13m-a-year lease at Churchill Place, E14, which runs until 2039 with no break clause.
This has left the EMA facing the prospect of having to sublet the building and act as a commercial landlord for the next 20 years.
If the ruling had gone in the EMA’s favour, it would have been able to walk away from the property after Brexit without paying further rent and, according to evidence given during the trial by Canary Wharf Group chief executive and chairman Sir George Iacobescu, this would have immediately cost CWG £264m owing to the financing arrangements of the building.
In his ruling, the judge said that, while the EU may not want to have the headquarters of one of its agencies in a non-EU country, there was no legal reason why it should not. He acknowledged that Brexit is “a seismic event”, but said that it didn’t change the fact that the parties had negotiated an “out clause” in the lease if the EMA decided to leave.
Following the ruling, Iacobescu said: “We have always firmly believed that Brexit did not amount to a frustration of the EMA’s lease. We fulfil our contracts and expect other parties with whom we enter contracts to respect the law and their own obligations, particularly in the case where a party is created and backed by an international institution.
“If the EMA had been successful, it could have undermined fundamental principles of English law and set an unfortunate precedent. We will continue to co-operate as landlords with the EMA, as provided for contractually in our lease agreement.”
See also: EMA Brexit dispute analysed by the QCs who fought the case
See also: Canary Wharf v EMA Brexit ruling in 10 minutes
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