20 Dec What Is The Purpose Of A Standstill Agreement
If the terms of the agreement are not clear, the courts will apply the rules of interpretation recently clarified by the Supreme Court of Wood/Capita Insurance Service Ltd. The defendant argued that the agreement had extended the limitation period, so that one day after the expiry of the status quo period was not a procedure; Contracting parties often enter into status quo agreements as they approach the expiry of a limitation period. This case shows the difference between the suspension of time and the lengthening of time for the purposes of the statute of limitations in a status quo agreement. With respect to interpretation, the Tribunal found that the status quo agreement had suspended time, so that the remainder of the limitation period continued after the expiry of the status quo agreement. Although the court does not deprive applicants of the possibility of (1) Stuart Howard Russell (2) Naomi Patricia Russell v (1) Peter Stone (2) PSP Consultants Limited (3) PSP Consultants Limited (3) PSP Consultants (a firm)   EWHC 1555 (TCC). Courts have often asked applicants to initiate proceedings in these circumstances and then apply for a stay to follow the protocol. A stay works to suspend time, but, contrary to a status quo agreement, a court order is required. The Technology and Construction Works Site (CBT) guide recommends this course. As Coulson J commented in Russell v Stone, this is a much safer option than the imbroglio resulting from the self-inflicted complication of status quo agreements that do not work. If the applicant requests an agreement shortly before the statute of limitations expires, the delay may be problematic. Even if the conditions are definitively established, all the formal conditions agreed by the parties, such as the signing, dating and restitution of the contract, cannot be met until the critical date. During the status quo period, a new agreement is negotiated, which generally changes the original loan repayment plan. This option is used as an alternative to bankruptcy or enforced execution if the borrower cannot repay the loan.
The status quo agreement allows the lender to save some value from the loan. In the event of forced execution, the lender must receive nothing. By working with the borrower, the lender can improve its chances of repaying some of the outstanding debt. Parties to the dispute may decide to enter into a status quo agreement if they are about to expire, but the plaintiff is not yet willing to assert his rights (because, for example, the parties are in negotiations that, if successful, would prevent any recourse). In the case of the applicants, for example, they had one month from the six-year limitation period during which they had entered into the status quo contracts, a one-month period during which the third status quo agreement had expired, a one-month period. In the case of the defendant, the period for the opening of the proceedings had expired at the end of the third status quo agreement (i.e. November 30, 2016). If the applicants were right, they had made their claims in a timely manner, but if the defendants were right, the applicants were no longer in a timely manner and the claims were prescribed.
However, where a status quo agreement is considered the most appropriate option, efforts should be made to ensure that the parties explicitly agree on the expected effects of the non-status quo (i.e., suspend or extend the time limit for the purposes of the restriction) and that the text of the status quo agreement clearly and systematically reflects that intention.