Some commentators argued that this was indeed a “storm in a cup of tea,” and they were right; the decision was overturned in July on appeal (Cowan v. Foreman, EWCA Civ 1336 2019). While an extension of the limitation period is left to the discretion of the Tribunal, it is open to the parties, as always, and it is likely that the courts will abide by the agreement. As a result of this construction, the claimant had to breach the clause prohibiting him from initiating proceedings earlier in order to avoid the limitation period. This was obviously nonsense – the court will not interpret a treaty in such a way that a party must breach its terms for the agreement to work. Coulson J. considered that the agreement suspended the time limit, so that at the end of the standstill period, the applicant still had time to initiate proceedings. Standstill agreements are often used in litigation. These recent cases give the impression that reaching a status quo agreement is difficult, but that agreements are reached every day to meet the needs of both parties.
Other problems may arise if the parties do not reach an agreement. In Russell, the parties did not understand the structure and intent of the practical law proposal. The model suspends the limitation period, so that at the end of the standstill period, the parties are in the same situation as at the time of the conclusion of the agreement. If they still had one month before the expiry of the limitation period, they still have one month at the end of the standstill period. The courts have often asked applicants to initiate proceedings under these conditions and then to request a stay of compliance with the protocol. A suspension is intended to suspend time, but, unlike a standstill agreement, it requires a court order. The Technology and Construction Court (TCC) Guide recommends this course. As Coulson J commented in Russell v Stone, this is a much safer option than the confusion resulting from the self-inflicted complication of stop agreements that don`t work.
Standstill agreements are very popular with lawyers, who may withhold their consent not to take stock if a party does not initiate proceedings within the prescribed time (statute of limitations). . . .