Kazeminy v Siddiqi & Ors

Factual and Procedural Background

This appeal concerns the construction of a settlement agreement entered into between the Appellant and the Appellee, along with various companies represented by each of them. The agreement, dated 22nd November 2010, was made on the first day of trial of claims brought by the Appellee against the Appellant relating to financing provided by the Appellee to enable commercial exploitation of certain innovative technologies developed by the Appellant. Another investor, referred to as Investor A, had also provided finance under tripartite agreements involving both parties and himself. Investor A was not a party to the original proceedings but was present to give evidence.

Subsequently, Investor A and a company controlled by him assigned all their rights against the Appellant and his companies to the Appellee. The Appellee then commenced new proceedings as assignee of Investor A's rights. The Appellant applied to strike out this claim on the basis that the rights sought to be enforced had been compromised by the settlement agreement. The application was dismissed by the trial judge, who held that the settlement agreement did not extend to rights acquired by assignment from third parties.

Legal Issues Presented

1. Whether the broad language of the settlement agreement, particularly clause 5, was intended to extinguish claims that the Appellee acquired from third parties by assignment.
2. How the context of the settlement agreement affects the interpretation of its wide-ranging terms, including the phrases "whether past, present or future and whether or not known or contemplated" and "in any way connected with".
3. Whether the settlement agreement covers claims arising solely from dealings between the Appellant and third parties, or is limited to claims arising directly between the original parties to the agreement.

Arguments of the Parties

Appellant's Arguments

• The language of clause 5 is exceptionally broad and clearly intended to capture every possible claim the Appellee might have against the Appellant, including future and unknown claims.
• The purpose of the clause was to ensure a clean break, allowing the Appellant to develop and exploit his inventions without fear of further claims from the Appellee.
• The phrase "by any person whatsoever" was intended to include claims arising from third parties such as Investor A, thus discharging any rights the Appellee might acquire through assignment.
• The claims in the new proceedings are closely connected to the original proceedings and the tripartite agreements, supporting the argument that they fall within the settlement's scope.

Appellee's Arguments

• Despite the broad language, the context shows the parties intended to settle only claims arising between themselves as original parties, not rights acquired from third parties.
• The parties did not contemplate the possibility of assignment of rights from third parties, and the settlement agreement contains no express provision addressing this eventuality.
• The words "by any person whatsoever" were included to address disputes about proper claimants among the parties themselves, not to cover claims assigned from third parties.
• It would be unbusinesslike and surprising if the parties had intended to extinguish third-party rights without explicit language to that effect.

Table of Precedents Cited

Court's Reasoning and Analysis

The court acknowledged the exceptionally broad language of clause 5 of the settlement agreement, including phrases indicating coverage of past, present, future, known, or unknown claims. However, the court emphasized that the interpretation of such broad language must be guided by the context in which the agreement was made. The parties were aware of the claims that Investor A might have but had not joined him in the proceedings or settlement negotiations, indicating that the settlement was directed only to claims between the original parties.

The court found no indication in the agreement that the parties contemplated the assignment of rights from third parties or intended to extinguish such rights. The inclusion of the phrase "by any person whatsoever" was interpreted in light of a dispute about proper claimants among the original parties, not as covering third-party assignments. The court rejected the argument that the settlement discharged claims acquired from Investor A, reasoning that such an interpretation would result in an unbusinesslike windfall to the Appellant, which the parties would have addressed expressly if intended.

Ultimately, the court agreed with the trial judge that the settlement agreement was confined to rights arising between the original parties and did not extend to rights acquired by the Appellee from third parties.

Holding and Implications

The court DISMISSED THE APPEAL, upholding the trial judge's decision that the settlement agreement did not extinguish claims the Appellee acquired by assignment from third parties.

The direct effect is that the Appellee may proceed with claims based on rights assigned from Investor A. The decision does not establish new precedent but confirms the principle that the scope of broad settlement language must be interpreted in context, particularly regarding third-party rights.