The Only Way Is Up?

Scottish Widows Fund and Life Assurance Society v BGC International (Formerly Cantor Fitzgerald International) [2012] EWCA Civ 607

Summary

The Court of Appeal considered the construction of a complex rent review clause where the parties had not foreseen a fall in open market rental value.

Facts

Scottish Widows took a sub-underlease of premises at One America Square in the City of London for 20 years with an upwards only rent review at five yearly intervals commencing in 1996. Scottish Widows proceeded to grant a sub-sub-underlease to BGC International. At the time of granting the sub-sub-underlease, the rent payable by Scottish Widows under the sub-underlease was well above market value (passing rent was £1,283,424, market rent was £752,765). BGC refused to pay the equivalent of the rent which was passing under Scottish Widows' own lease.