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A settlement agreement for a commercial dispute between two businesses under DIFC law and the DIFC 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.
Dubai International Financial Centre (DIFC)
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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 payable in the currency in which it is expressed. If the Paying Party pays from an account in another currency, it bears the cost of conversion and any shortfall, and the Receiving Party is treated as paid only when the full amount in the agreed currency has been credited to the Payment Account. Payments are to be made from an account in the Paying Party's own name unless the Receiving Party agrees otherwise in writing.
The Settlement Sum already takes account of any value added tax that may apply, and the Receiving Party will not issue a tax invoice for it unless the law of the United Arab Emirates requires one, in which case the Paying Party will pay no more than the Settlement Sum. Neither party guarantees the tax treatment of the payment for the other. If the Paying Party must by law withhold or deduct a tax, it must pay the amount over to the authority within the legal time limit and hand the Receiving Party the official proof of payment.
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.
On the terms of this agreement, the Settled Claims are completely and finally compromised, and neither party has any further claim against the other in respect of them once the Settlement Sum has been paid.
"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" are, as to each party, that party; the companies and other entities that control it, that it controls or that are under common control with it; and the current and former directors, officers, employees, agents, insurers and advisers of any of them, in each case acting in that capacity.
"Excluded Matters" are: any claim to enforce this agreement; any claim that arises from fraud, a deliberate misstatement or a deliberate concealment which the releasing party could not have discovered at the date of this agreement; and any right or claim that the laws of the DIFC or of the United Arab Emirates do not allow the parties to waive or compromise.
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.
Each party giving a release agrees that it will not, and will ensure that its affiliates will not, start or continue any action, arbitration or complaint against a Released Person of the other party about a Settled Claim, or knowingly help a third party to do so, unless a court, tribunal or authority requires it by law. If it breaks this promise, the Released Person may rely on this agreement to have the proceedings stayed or dismissed.
The releasing parties understand that there may be claims they do not yet know of, or know of only in part. They have decided to settle on the basis that the Settled Claims include such claims, whether or not they could have been discovered, and each accepts the risk that its understanding of the facts is incomplete. This does not apply to the Excluded Matters.
Each Released Person who is not a party may enforce the release in this agreement, so far as the laws of the DIFC allow a third party to rely on a contract made for its benefit. The parties may nevertheless cancel or amend this agreement by mutual agreement without the consent of, or notice to, any Released Person.
This agreement settles claims that are disputed. By entering into it or acting under it, no party admits liability, fault or the truth of an allegation, and no party may refer to the agreement to prove liability in any other proceedings, except to enforce it or to show that the Settled Claims have been compromised.
Within the Withdrawal Period, the parties must sign and file with the DIFC 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.
If the Proceedings are before the DIFC Courts, the parties will ask the court to make an order recording that the Proceedings are stayed or discontinued on the terms of this agreement, and will lodge the terms in a confidential schedule or annex where the court allows. A party in default may be made the subject of an application under that order for payment, so that the Receiving Party does not need to start fresh proceedings. If the DIFC Courts do not permit the terms to be annexed, the parties will ask for the order to refer to this agreement by date only.
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.
Offers and statements made while the parties were negotiating this settlement were made in confidence and without prejudice to their legal positions, and neither party may rely on them in later proceedings about the Dispute. The signed agreement is a different matter: it is binding on the parties and either may present it to the DIFC Courts or any other court or tribunal to enforce it or prove the settlement.
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 represents and warrants that it is validly constituted and has full legal capacity and authority to enter into and perform this agreement, that its directors or other competent organs have approved it, that every necessary third-party or regulatory consent has been given, and that the person executing this agreement for it holds a valid authorisation, such as a board resolution or a power of attorney, which it will provide on request.
Each party warrants that no right in a Settled Claim that it releases has been assigned, pledged, sold or otherwise transferred to another person, including a litigation funder or insurer, and that, to its knowledge, no other person has a right to assert a Settled Claim on its behalf.
Each party warrants that, other than the proceedings (if any) identified in this agreement, neither it nor, to its knowledge, any of its affiliates has begun an action, an arbitration, or a complaint to any authority against a Released Person of the other party on account of a Settled Claim.
Each party confirms that it has understood this agreement, has been free to take independent legal advice before signing it, and is signing voluntarily.
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.
An amount that is not paid when due carries interest at the Default Interest Rate from the due date until it is received, whether or not a judgment has been given. The DIFC Courts may in addition award the interest on a judgment debt that the Rules of the DIFC Courts allow, and the parties intend the rate in this agreement to compensate the Receiving Party for the delay, to the extent the law allows.
The parties record that, if the Paying Party defaults, the Receiving Party's loss will be hard to quantify, and that the right to accelerate the unpaid balance and to recover the costs of enforcement is a fair way of protecting its interest in being paid on time. It is not intended to penalise the Paying Party. If a court holds that any part of the sum claimed is excessive under the DIFC Contract Law, the Receiving Party may recover the remainder.
Each notice under this agreement must be written, in English, and delivered by hand, by courier or by 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 at the replacement address that has been notified. A hand or courier notice is given when it is delivered. An email notice is given when it is sent, unless an error message comes back to the sender, and a notice sent on a day that is not a working day in the place of receipt is given on the next working day. Service of documents in the DIFC Courts is governed by the Rules of the DIFC Courts.
This is the complete agreement between the parties on the settlement of the Dispute. It replaces all previous negotiations, drafts and understandings on that subject, and no party has relied on anything said or written outside it. A party's liability for fraud is not excluded.
Each party will, on reasonable request, execute the documents and take the steps that are needed to carry this agreement into effect, including any filing with the DIFC Courts, and will bear its own costs of doing so.
No right under this agreement may be assigned without the other party's written approval. This agreement may be amended only by a written document signed by both parties, and a waiver is effective only if it is written and signed, and only for the matter it addresses. A provision that is invalid or unenforceable is severed and the remaining provisions continue to apply. Except for the Released Persons, as the release provides, no person who is not a party can enforce this agreement. The parties may sign it in counterparts and electronically.
The laws of the Dubai International Financial Centre, including the DIFC Contract Law, govern this agreement and any non-contractual obligation connected with it. Every dispute about this agreement, including its validity, meaning, performance and enforcement, belongs to the exclusive jurisdiction of the DIFC Courts, to which each party submits even if neither is established in the DIFC.
The parties accept that a DIFC Courts order or judgment that enforces this agreement may need to be recognised or executed in the courts of Dubai outside the DIFC, in other emirates, or abroad, and that the law in each of those places decides whether and how that happens. Each party agrees to cooperate with that process and, if it is the party in default, to pay the reasonable costs of translating and legalising the documents for that purpose.