The parties to a settlement agreement were in dispute about interpretation of the agreement. One of the parties wanted the court to look at exchanges between the parties before the agreement to show the contractual context but those exchanges were “without prejudice”. Did that prevent the court from looking at the documents?

Although the general rule is that without prejudice communications do not lose their privileged status because the parties conclude an agreed settlement, there are exceptions to that rule, in particular when the issue is whether those communications have resulted in a settlement agreement. The court thought that it would make little sense for the law to admit evidence about that issue without also admitting evidence about what the terms of a settlement agreement were. For this and other reasons, including the interests of justice, the court decided that evidence of the without prejudice exchanges was admissible to the extent that it would have been admissible had the exchanges not been without prejudice. Which would entitle the court to look at the factual background in accordance with the decision in Chartbrook Ltd v Persimmon Homes Ltd (see below).

Oceanbulk Shipping & Trading SA v TMT Asia Ltd & Ors [2009] EWHC 1946 (Comm)