10 Sep Agreement To Suspend Limitation Period
Standstill agreements are commonplace in dispute resolution, but not without complexity. Limitation should always be at the forefront of lawyers` minds, but this is especially true given the challenges faced by COVID-19. An understanding of the instruments you have should help limit difficulties and a key instrument is a moratorium on limitation or a standstill agreement. This scenario shows that swift action may be necessary if the parties are to preserve their claims. In these situations, the restriction can be addressed by entering into a standstill agreement or by initiating a “safeguard procedure” by the parties. The opening of an appeal implies the opening of judicial proceedings (dispute) or the notification of an arbitration claim. Other forms of dispute resolution, such as statutory judgments or pre-action protocols, do not preclude limitation periods. Consequently, the purpose of the standstill agreements was to suspend the limitation period and the applicants had asserted their rights in good time. If the applicant does not request an agreement until shortly before the expiry of the limitation period, time may be a problem. Even when the terms are over, all formal requirements agreed by the parties, such as the signing, date and return of the agreement, cannot be finalized before the critical date. 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. Potential beneficiaries should carefully assess their possibilities when approaching the expiry of a limitation period. Coulson J observed that status quo agreements are becoming more frequent and noted that he had “the overwhelming feeling that they may just be a self-inflicted complication.” He suggested that if the statute of limitations is an issue and it takes longer to work, the claimants should instead consider initiating the proceedings within the statute of limitations and applying for a stay. These recent cases give the impression that reaching a status quo agreement is difficult, but that agreements are reached every day to meet the needs of both parties. Other problems may arise if the parties do not reach an agreement. Home / Insights / Limitation periods and status quo agreements: how can they affect your rights? In Exsus Travel Ltd v Baker Tilly, counsel for the applicant misinterpreted the operation of the standstill period. . . .