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Standstill Agreement Practical Law

By Zach Arnold | October 8, 2021

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The Russell party parties confused the issue by granting amendments regarding the extension of the limitation period. They also added a clause according to which the parties would not initiate or initiate proceedings during the term of the contract. This goes against the structure of the proposal. In Russell, the parties did not understand the structure and intent of the practical law proposal. The model suspends the limitation period, so that at the end of the standstill period, the parties are in the same situation as at the time of the conclusion of the agreement. If they still had one month before the expiry of the limitation period, they still have one month at the end of the standstill period. The application for a stay is, of course, subject to the (often large) judicial fee for the seizure of the proceedings and the subsequent application. Deadlock agreements are not. The Supreme Court questioned the increasing use of status quo agreements in litigation and said they would “perhaps only be a self-inflicted complication” if it were easier to request an inventory. The status quo agreement gives time to both parties.

It also means less useful that the parties (usually their lawyers) have to negotiate and agree on a contract at a time when they are gathering evidence and considering the substance of the dispute. If there is more than one defendant, the applicant will want to agree on identical standstill agreements with all of them. Even if all defendants are willing to play ball, which they may not be, plaintiffs often end in several subsequent agreements and variants when time passes again. Coulson J added that while the status quo agreements in this case were designed by well-known law firms – Beale & Co and Elborne Mitchell – “the disputes that currently arise suggest that there may have been a fundamental difference between them on what the standstill agreements should offer. Standstill agreements to extend or suspend a limitation period have become a regular part of civil proceedings. They allow parties to focus on the requirements of the pre-action protocol without having to worry about restrictions. You can also reduce court costs if the dispute is settled before the appeal. So what`s the problem? Two recent cases – Russell vs. Stone and Muduroglu vs.

Stephenson Harwood – illustrate the flip side of the status quo agreements. The benefits and pitfalls are studied. If the terms of the agreement are unclear, the courts apply the rules of interpretation recently clarified by the Supreme Court in Wood v. Capita Insurance Service Ltd. The defendant argued that the agreement had extended the limitation period, so that the proceedings initiated one day after the expiry of the standstill period no longer delegate time. As a result of this construction, the claimant had to breach the clause prohibiting him from initiating proceedings earlier in order to avoid the limitation period. This was obviously nonsense – the court will not interpret a treaty in such a way that a party must breach its terms for the agreement to work. Coulson J. considered that the agreement suspended the time limit, so that at the end of the standstill period, the applicant still had time to initiate proceedings.

If the defendant becomes aware of an error, the court may deny him the opportunity to benefit from his ruthless conduct. . . .

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