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A settlement agreement for a commercial dispute between two businesses under ADGM law and the ADGM Courts: a settlement sum paid in one payment or instalments, full and final settlement with a mutual or one-way release, no admission of liability, confidentiality, ending any proceedings, costs, warranties of authority and no assignment of claims, and acceleration on default.
Abu Dhabi Global Market (ADGM)
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This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [TO BE CONFIRMED — Party 1 legal name and details] (the "Party 1") and [TO BE CONFIRMED — Party 2 legal name and details] (the "Party 2").
"Dispute" means [TO BE CONFIRMED — Description of the dispute being settled].
"Proceedings" means [TO BE CONFIRMED — Court or arbitration proceedings being ended (forum and case number)].
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"Payment Date" means [TO BE CONFIRMED — Date by which the settlement sum, or the first instalment, must be paid].
"Instalment Schedule" means [TO BE CONFIRMED — Instalment amounts and due dates].
"Payment Account" means [TO BE CONFIRMED — Receiving Party's bank account for payment].
"Withdrawal Period" means 7 days after the Receiving Party receives the Settlement Sum in full.
"Grace Period" means 7 days.
"Default Interest Rate" means [TO BE CONFIRMED — Interest rate on late payments].
"Costs Contribution" means [TO BE CONFIRMED — Contribution to the Receiving Party's legal costs].
"Excluded Claims" means [TO BE CONFIRMED — Specific claims that are NOT settled].
"Agreed Statement" means [TO BE CONFIRMED — Agreed statement about the settlement].
Where a party is an individual, "it" and "its" include him or her, and "his" and "her"; a reference to a party's power and authority includes his or her legal capacity; a reference to a party's directors, officers or senior managers applies only to a party that is a body corporate or other entity; and an individual party may sign this agreement personally.
The Dispute has arisen between the parties, and the claims made in connection with it are contested.
The Dispute is the subject of the Proceedings.
The parties have agreed to settle the Dispute on the terms of this agreement, to avoid the cost, time and uncertainty of continuing it, and without any admission of liability.
The Party 1 (the "Paying Party") must pay the Settlement Sum to the Party 2 (the "Receiving Party") in accordance with this Settlement Payment clause.
The Paying Party must pay the Settlement Sum in full, in a single payment, no later than the Payment Date.
Each payment must be made in cleared funds by bank transfer to the Payment Account, without any set-off, counterclaim, deduction or withholding except as required by law. A payment is made when the funds are received in the Payment Account. The Receiving Party must confirm receipt in writing promptly on request.
The Settlement Sum is agreed as the full amount payable, with any value added tax that is chargeable on it included. The parties have not agreed that any part of it is a payment for a supply, and if a tax authority later treats it as one, neither party may demand an additional sum from the other on that account. Each party deals with its own tax on what it pays or receives, and the Paying Party may deduct tax from a payment only where it must by law, in which case it must pay the tax over on time and give the Receiving Party the tax certificate within 30 days.
Each party bears its own legal and other costs in connection with the Dispute, any proceedings about it, and the negotiation and performance of this agreement.
The parties intend that the Settlement Sum and the other promises in this agreement fully and finally settle the Settled Claims, with nothing further owed by either party in respect of them.
"Settled Claims" means all claims, demands, rights of action and liabilities of any kind, whether known or unknown, actual or contingent, present or future, and however arising, including in contract, tort or under statute, that arise out of or in connection with the Dispute, any proceedings about it, or the facts and matters giving rise to it, including any claim for interest or costs, but excluding the Excluded Matters.
"Released Persons" means, for each party, that party together with its affiliates and its and their present and former directors, officers, employees, agents and professional advisers. An affiliate of a party is a person that controls it, is controlled by it, or is under common control with it, in each case directly or indirectly.
"Excluded Matters" means (a) a claim to enforce this agreement; (b) a claim founded on fraud, fraudulent misrepresentation or dishonest concealment that the releasing party did not know about at the date of this agreement; and (c) any liability or claim that cannot lawfully be released or compromised by agreement, including under a rule of ADGM law that is mandatory.
The Excluded Claims are also Excluded Matters, and nothing in this agreement releases or affects them.
With effect from the date on which the Receiving Party receives the Settlement Sum in full, each party, in respect of its own claims only, releases and forever discharges each of the other party's Released Persons from all Settled Claims.
A party that gives a release in this agreement promises the other that neither it nor any of its affiliates will bring, maintain or encourage any claim or proceedings against a Released Person of the other party in respect of a Settled Claim. This promise does not apply where a law or a court order compels a party to act, and a breach of it entitles the Released Person concerned to rely on this agreement as a complete defence and to recover its costs of doing so.
Each releasing party accepts that facts may later come to light, or claims may later emerge, that are different from or greater than those it now knows of or suspects. It intends the release to cover every Settled Claim, including any it is not aware of when it signs, and it takes the risk that the true position turns out to be different. This does not affect the Excluded Matters.
A Released Person who is not a party may enforce the release and this clause if ADGM law lets it do so, but the parties may end or change this agreement at any time without telling or obtaining the consent of any such person. If ADGM law does not allow the Released Person to enforce, the party that has received the release holds the benefit of it on that person's behalf.
The parties entered into this agreement to put an end to a disputed claim. Neither this agreement nor anything done to carry it out is, or may be treated as, an admission by a party that it is liable or has acted wrongly, and no party may use it as evidence of fault, except in proceedings to enforce its terms or to prove that the Dispute is settled.
Within the Withdrawal Period, the parties must sign and file with the ADGM Courts, or any other court or tribunal hearing the Proceedings, a consent order discontinuing or dismissing the Proceedings, including any counterclaim, with no order as to costs, and must take any other step reasonably required to bring the Proceedings to an end.
Where the Proceedings are before the ADGM Courts, the parties may agree to set out the terms of this agreement in a schedule to the consent order, so that the order stays or ends the Proceedings on those terms and either party can apply to the ADGM Courts to enforce them without starting new proceedings. If they do, the schedule must repeat the payment terms, the default provisions and the release exactly as they appear in this agreement, and this agreement prevails if the two differ. The confidentiality of the schedule must be protected by asking the court to keep it out of the public record, so far as the court permits.
Until the Proceedings have ended, the parties must not take any further step in them except to ask the court or tribunal to stay them, extend time or vacate any hearing so as to give effect to this agreement, and must make any such request jointly where needed.
Discussions that led to this agreement were held without prejudice to the parties' positions in the Dispute, and under the rule of English common law, applied in the ADGM, that protects such discussions from being used as evidence. That protection ends for the signed text of this agreement, which either party may put before a court or tribunal in order to enforce it or to show that the Dispute has been settled.
Each party must keep the terms of this agreement, and the negotiations that led to it, confidential, and must not disclose them except to its affiliates, professional advisers, auditors, insurers and financiers who need to know them and are bound to keep them confidential; as required by law, a court, a regulator or the rules of a stock exchange; to a tax authority; to enforce this agreement; or with the other party's written consent. Either party may say that the Dispute has been resolved to the parties' mutual satisfaction.
Either party may make the Agreed Statement in response to an enquiry about the Dispute. Neither party may make any other public statement about the Dispute or its settlement without the other party's written consent, and this takes priority over any statement the Confidentiality clause would otherwise permit.
Each party must not make, and must take reasonable steps to ensure that its directors and senior managers do not make, any statement to a third party that is intended or reasonably likely to disparage the other party or its Released Persons in connection with the Dispute. This does not restrict any disclosure permitted by the Confidentiality clause, any statement required by law or made in legal proceedings, or any report to a regulator or law enforcement authority.
Each party confirms that it has the capacity and corporate power to sign this agreement and carry it out, that the necessary approvals from its board, shareholders, lenders or regulators have been obtained, and that the individual who signs for it has been authorised to bind it. A party that is registered in the ADGM further confirms that it is not at the date of this agreement the subject of an application to strike it off the register.
Each party states that it has not sold, assigned, charged or otherwise disposed of any Settled Claim, or any right or interest in one, and, as far as it knows after reasonable inquiry, nobody else holds a right to bring a Settled Claim in its name or for its benefit, whether as insurer, funder, trustee or otherwise.
Each party states that, except for the proceedings described in this agreement, neither it nor, as far as it knows, any of its affiliates has brought any claim, complaint or proceedings, in any court, tribunal or authority, against a Released Person of the other party in respect of a Settled Claim.
Each party states that it has read this agreement, has been advised or has had a fair opportunity to be advised by a lawyer of its choice on its meaning and effect, and signs it freely and without any pressure from the other party.
If the Paying Party does not pay any amount due under this agreement in full within the Grace Period after its due date, the Receiving Party may by written notice declare the whole unpaid balance of the Settlement Sum immediately due, and the Paying Party must pay it immediately. The Receiving Party may then recover the unpaid balance as a debt, together with its reasonable costs of recovery. The Receiving Party's remedy for non-payment is to enforce this agreement, and it may not pursue the Settled Claims themselves.
Time for bringing a claim to enforce this agreement runs from the date of each payment default and, for the balance accelerated under the Default clause, from the date of the Receiving Party's notice. The parties do not by this agreement shorten any limitation period that applies to such a claim, and the Receiving Party may rely on any acknowledgement of the debt that the Paying Party gives by making a part payment.
If an amount is not paid on its due date, interest accrues on it at the Default Interest Rate, day by day, from the due date to the date it is received, before and after any judgment. The parties accept the rate as a fair measure of the cost of late payment and not as a penalty, and it applies only to the extent that English common law, applied in the ADGM, allows.
If a payment made under this agreement is later set aside, avoided or ordered to be repaid because the Paying Party becomes insolvent, the Receiving Party's release is treated as never having taken effect to the extent of the payment set aside, and the Receiving Party may then claim the Settlement Sum, or the part set aside, as a debt in the insolvency, without having to prove the Settled Claims themselves. This clause applies only where the law of the Paying Party's insolvency permits it.
Any notice given under this agreement must be written and delivered by hand, courier or email to the Party 1 at [TO BE CONFIRMED — Party 1 notice address and email] or the Party 2 at [TO BE CONFIRMED — Party 2 notice address and email], or to a replacement address that the recipient has notified for this purpose. Delivery by hand or courier takes effect on delivery. An email takes effect when it is sent, unless the sender receives an automatic message that it has not been delivered, and a message sent outside working hours in the recipient's place takes effect at the opening of business the next working day. Documents in proceedings before the ADGM Courts must be served in the manner those courts' rules require.
This agreement contains everything the parties have agreed about the settlement of the Dispute and replaces every earlier proposal, negotiation and understanding concerning it. Neither party has entered into it relying on a statement that it does not contain. Nothing in this clause limits a party's liability for fraud, and English common law, applied in the ADGM, would not permit it to do so.
Each party must, when asked and at the cost of the party asking unless this agreement says otherwise, sign the documents and do the acts reasonably needed to give full effect to the settlement, including any filing with the ADGM Courts or another body.
Neither party may assign or transfer a right under this agreement without the other's written consent. An amendment must be written and signed by both parties; a waiver must be written and signed by the waiving party and covers only the matter it names. If a term cannot be enforced, the others remain in force. Only the parties, and the Released Persons as the Settlement and Release clause provides, may enforce this agreement. It may be signed in counterparts and by electronic signature, and an electronic signature has the same effect as a handwritten one between the parties to the extent ADGM law recognises it.
English common law, as applied in the Abu Dhabi Global Market through the Application of English Law Regulations 2015 and the enactments of the ADGM, governs this agreement and any non-contractual obligation connected with it. The ADGM Courts have exclusive jurisdiction over any dispute about the agreement's formation, meaning, performance or enforcement, and each party submits to them and gives up any objection that they are an inappropriate forum. That does not prevent a party from enforcing an ADGM Courts judgment, or this agreement, against assets wherever they are.
A party that is not established in the ADGM appoints [TO BE CONFIRMED — Name and address of the agent for service in the ADGM] as its agent to receive service of documents in any proceedings about this agreement before the ADGM Courts, and must keep an agent in the ADGM until its obligations under this agreement end. Service on the agent is service on the party.