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16th January 2019

BREXIT – ‘Frustration’ under the microscope

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Whilst the populace of the UK can be heard loudly voicing its frustration at the drama playing out in Westminster, ‘Frustration’ of a very different sort – of a legal character - is being examined in the calm and order of a London court room of the High Court.

The hearing of Canary Wharf (BP4) T1 Limited and others v European Medicines Agency begins today in the High Court. The issue at stake? : Whether the UK’s decision to leave the EU should be treated in law as having ‘frustrated’ the European Medicines Agency’s 2011 25 year £500 million lease at Canary Wharf, entitling the agency to step out of the contract and away from its tenant liabilities (including for future rent). Following the UK’s Article 50 withdrawal notification, the EMA announced its decision to move the centre of its operations to Amsterdam.

‘Frustration’ is a principle of English law and comes into play where in the course of performance of a contract there is a supervening event which the terms of the contract do not anticipate and which fundamentally changes the outstanding requirements for performance of the agreement in a way that could not have been reasonably contemplated at the time the contract was made. The Court has to consider whether in the circumstances it would be unjust to hold the parties to the bargain they made.

One of the key points for the Court is the test for ‘forseeability’ – to what extent a reasonable person in 2011 could have foreseen the decision to leave the EU.

For an interesting examination of the legal issues before the Court, see:

The case is listed for a week and Judgment may be reserved, so we shall have to wait a bit before we know the Court’s findings and can measure their implications.

Dominic Hopkins is head of Disputes and Litigation at Hewitsons and an Associate Member of the UK Constitutional Law Association. For more information please contact Dominic Hopkins on 01604 233233 or click here to email Dominic.