Settlement agreements: Destin Trading Inc v Saipem SA [2025] EWHC 668 (Ch)

Summary:

The recent case of Destin Trading Inc (“Destin”) v Saipem SA (“Sapiem”) [2025] EWHC 668 (Ch) includes discussion in relation to the drafting of settlement agreements and, in particular, exclusive jurisdiction clauses.

Following a series of disputes between Destin and Siapem, the parties entered into a settlement agreement which provided that (i) the parties’ contract had come to an end and parties were released from any future claims arising out of the agreement; and (ii) the English courts had exclusive jurisdiction over any dispute arising out of the settlement agreement.

In 2024, Destin raised a claim again Saipem alleging that they had been induced into entering into the settlement agreement as a result of misrepresentations by Saipem. Destin sought rescission of the settlement agreement and claimed restitution and damages. Saipem applied to stay Destin’s monetary claims under the Arbitration Act 1996, arguing that the monetary claims arose under the original contract and were therefore subject to arbitration.

The Court refused the stay.

The Court held that the monetary claims were, in substance, claims for deceit and restitution arising from the settlement agreement. The governing dispute resolution clause was therefore that contained in the settlement agreement.

The Court applied the reasoning set out in Monde Petroleum SA v Westernzagros Ltd [2015] EWHC 67 (Comm) by analogy (notwithstanding that the Monde Case involved a termination agreement, as opposed to a settlement agreement). As a result, the Court concluded that when a settlement agreement is intended to bring earlier agreements (and related claims) to an end, and it contains a dispute resolution clause inconsistent with the underlying agreement, it will generally be construed as having a superseding or overriding effect.

Comment:

Jurisdiction clauses are often viewed as simply boiler plate. After spending what is likely to be significant time and expense in preparing a carefully crafted settlement agreement, it’s important that you consider the impact of your jurisdiction clause.

If the project is at a close, you may be content to amend the jurisdiction for any subsequent disputes which have not yet arisen – particularly if the defects period is over and you are at risk of time bar for any future claims.

However, if you resolve an interim dispute at an earlier stage, consider whether you are amending the jurisdiction provisions for only certain claims. You don’t want to end up in a situation where you are arguing about which proceedings apply, or different claims have to be resolved in different forms of proceedings.

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