Case Details

Citation(s)
2012 SLG 1538 2012 SLD 1538 2012 SCMR 1112
Supreme Court of Pakistan
dates of hearing: 14th, 15th July and 27-10-2010
LORD PHILLIPS P., LORD RODGER, LORD WALKER, LORD BROWN, LORD MANCE, LORD CLARKE AND SIR, JOHN DYSON SCJJ

OCEANBULK SHIPPING AND TRADING SAvsTMT ASIA LTD. and others

Law:

Section:

(a) Interpretation of Agreement-------'Without prejudice' rule--- Scope--- Exceptions--- Negotiations expressed to be 'without prejudice' to compromise dispute resulting in a settlement agreement--- Evidentiary value--- Dispute over interpretation/construction of terms of the settlement agreement---Facts/representations made during without prejudice negotiations admissible as evidence to aid interpretation/construction of the settlement agreement notwithstanding the without prejudice rule---Scope---Parties had entered into negotiations which were expressed to be 'without prejudice' to settle a dispute between them and subsequently entered into a written settlement agreement to compromise the dispute---Disagreement between the parties over the interpretation of the terms of the settlement agreement---Contention of the defendant (appellant) was that representations made during the 'without prejudice' negotiations could be relied upon as an aid to interpreting the settlement agreement between the parties---Validity---Evidence in support of representations made during 'without prejudice' negotiations was in principle admissible as part of the factual matrix or surrounding circumstances on the true construction of the settlement agreement---No reason existed, in circumstances, why the ordinary principles governing the interpretation of a settlement agreement should be any different regardless of whether the negotiations which led to it were without prejudice---Process of interpretation of the settlement agreement should in principle be the same, whether the negotiations were 'without prejudice' or not, as in both the cases the evidence is admitted in order to enable the court to make an objective assessment of the parties' intentions---Where a party to negotiations knew that, in the event of a dispute pertaining to what a settlement agreement meant, objective facts which emerged during the negotiations would be admitted in order to assist the court to interpret the said settlement agreement in accordance with the parties' true intentions; settlement was likely to be encouraged and not discouraged---Such an approach was the only way in which the modern principles of…
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