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. The standstill agreements contained recitals indicating that the purpose of the agreements was to extend the period during which the applicants could bring legal proceedings. In contrast, the operational provisions of the status quo agreements dealt with the „suspension“ of time and the „suspension of time“. The applicants referred to the provisions of the operative part and argued that the standstill agreements resulted in a suspension of the limitation period, while the defendants referred to the recitals (and certain other factors), arguing that the standstill agreements were intended only to extend the time limit. – The fact that the lawyers based the third standstill agreement on a proposal based on the principle of suspension of time supported the plaintiffs` position (despite serial derogations from the original). 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. In other industries, a standstill agreement can be virtually any agreement between the parties, in which both parties agree to discontinue the case for a specified period of time. It can be an agreement to defer planned payments in order to help a company overcome difficult market conditions, agreements, stop production of a product, agreements between governments or many other types of agreements. Consequently, the purpose of the standstill agreements was to suspend the limitation period and the applicants had asserted their rights in good time. Status quo agreements honour their name and present a temporary halt or „deadlock“ in trade relations. This impasse can give the parties time to stabilize conditions or avoid any failure within the framework of an agreement.
Under a standstill agreement, creditors agree not to take legal action against a debtor for a certain period of time. In return, the debtor generally undertakes not to carry out a transaction „in its normal operations“ and not to make sudden or significant changes in the ownership or control of the business. The parties may amend the terms of an agreement accordingly. The second scenario concerns claims against third parties. Defendants should be cautious before entering into standstill agreements with applicants without adequate legal information, if they may have a right against a third party that cannot be invoked under the Civil Liability Act 1978. . .