A number of preliminary issues came before the High Court in Silver Queen Maritime Limited v Persia Petroleum Services Plc  EWHC 2867 (QB), in which the Claimant claimed for monies due under a contract with the Defendant.
After the Claimant had issued proceedings, the parties negotiated a settlement deed in July 2009. The Defendant executed the deed and emailed it to the Claimant, but then purported to withdraw from the agreement on the basis that the Claimant had failed to disclose certain matters. The Claimant executed the deed, but a month later indicated that it would settle for a smaller sum provided that payment was made by a certain date. No such payment was made, and the Claimant brought proceedings to enforce the July 2009 settlement agreement. The issues for the court to consider were: (i) whether a concluded settlement had been reached in July 2009; (ii) if it had, whether it could be rescinded for non-disclosure; and (iii) whether there was a further settlement agreement between the parties in August 2009 such as to prevent the Claimant enforcing the July agreement.
The Court held:
- A settlement agreement was concluded between the parties in July 2009: it was an escrow, and took effect as a deed when the escrow conditions (i.e. that it be signed and returned) were fulfilled. The deed was irrevocable from the time of its delivery as an escrow and was clearly intended to be a deed binding on the Defendant. There was no express indication that the settlement deed was anything other than it purported to be, i.e. a document that had been executed and delivered as a deed and only needed to be signed and returned.
- This concluded agreement could not be rescinded for non-disclosure. The negotiation of agreements to settle litigation does not give rise to a duty of disclosure. There had been no duty on the Claimant, prior to entering into the agreement, to make the disclosure that the Defendant alleged that it should have made. Even if a fiduciary relationship had existed between the parties, this would not have survived the issue of litigation proceedings.
- There was no concluded settlement agreement in August 2009, and so the Claimant was not prevented from pursuing its claim under the July agreement.