Standstill Agreement Lawsuit

In Exsus Travel Ltd v Baker Tilly, counsel for the applicant misinterpreted the operation of the standstill period. The Tribunal rejected the argument that a violation of the law is due to the convention – there is no evidence that the defendant`s lawyer shared the wrong assumption or was aware of the error. The parties to the dispute may opt for the conclusion of a standstill agreement if they are approaching the expiry of the limitation period, but the claimant is not yet prepared to assert its rights (for example, because the parties are in negotiations which, if successful, would prevent a claim from having to be made). Standstill agreements are common in litigation and result in the inhibition or extension of the limitation period. The limitation period is the period (under the contract or the law) within which the claim can be invoked in court. Different types of claims have different limitation periods. It is likely that an appeal that will be brought in court after the expiry of the limitation period will probably be withheld as prescribed. As a result, applicants often propose standstill agreements in order to create more time for transaction interviews or to have their claims reviewed/advised without being under pressure to decide whether to initiate legal proceedings. Always check if there is a clause that defines the formalities to be respected. For example, it is common for shutdown periods to determine that changes must be made in writing. A telephone call to agree on an extension of time is not enough and all the arguments based on Estoppel are (at best) faced a serious challenge: Thomas v Home Office [2007] 1 WLR 230 (case concerning an alleged oral agreement extending the deadline for notification of an application form).

In the applicants` case, if they had one month left, for example, of the six-year limitation period they had set when concluding the standstill agreements, they still had a period of one month at the expiry of the third standstill agreement. In the defendant`s case, the procedural period expired at the end of the third standstill agreement (i.e. on 30 November 2016). If the claimants were right, they had to assert their rights in a timely manner, but if the defendants were right, the claimants were not in time and the claims were time-barred. . . .