In a landmark ruling in Oceanbulk Shipping & Trading SA v TMT Asia Limited and Others4, the Supreme Court has introduced a further exception to the circumstances in which without prejudice negotiations are admissible when construing a settlement agreement.

The parties had entered into settlement negotiations on a without prejudice basis, which resulted in a written settlement agreement. There was no issue about the existence or terms of the agreement, but a dispute arose as to the true construction of one of its terms.

Overturning the Court of Appeal, the Supreme Court ruled that no sensible line could be drawn between admitting without prejudice communications in order to resolve the issue of whether they have resulted in a concluded compromise agreement and admitting them in order to resolve what that agreement was.