Nightclub Annabel's is located at 46 Berkeley Square. The building’s freehold is owned by Berkeley Square Holdings, which also owns the freehold of number 45.
Berkeley Square Investments Ltd, bought a long lease on Number 45 for over £5 million in 2004, the Upper Trbunal (Lands Chamber) heard.
Planning permission for the new club was granted in 2016, but Berkeley Square Holdings pointed to a restriction in the lease which forbade the use of most of Number 45 for anything other than offices.
And the landlord, which owns about 90 properties in the area, said that would mean "Soho-isation" damaging to the square's salubrious reputation.
Yet another club in the square, they complained, would be "the thin end of the wedge", rendering the square "synonymous" with nightlife.
But Judge Bridge, sitting in the Upper Tribunal, ruled that the use of Number 45 as a club was "reasonable" and keeping it as offices would bring no "practical benefit" to the landlords.
The judge modified the restriction in the lease to enable the conversion of Number 45 into a "high-class private members' club."
The 2016 planning permission permits the erection of external terraces and a glazed extension to act as a "winter garden" for club goers in the building's central courtyard.