Gaydamak v Leviev

A written agreement is enforceable where it contains sufficient mutual obligations, even if its terms require construction or may invite later litigation. The court does not assess the adequacy of consideration, provided that legally sufficient consideration exists. An agreement may be concluded despite unusual arrangements for its custody or enforcement; those matters do not negate an intention to create legal relations. A settlement agreement is construed objectively and commercially. Where a signed agreement identifies its effective date by reference to a date written beside the relevant clause, the absence of a date elsewhere does not necessarily prevent it taking effect.

The claimant sought to enforce an alleged 2001 agreement under which the defendant was said to hold interests in Angolan and related diamond businesses equally for both parties. The defendant denied signing it and relied alternatively on a 2011 settlement agreement releasing all claims.

The court determined whether the 2001 agreement had been signed, whether it was supported by consideration and sufficiently certain, and whether the 2011 settlement had taken effect or had been procured by fraudulent representations concerning compensation.

1. 2001 Agreement. The court found on the balance of probabilities that both parties signed the agreement and that a signed copy was deposited with Rabbi Lazar. The evidence concerning its preparation, the contemporaneous documents, the parties’ business relationship and payments made through Calsen supported that conclusion.
2. The agreement contained sufficient consideration. Clauses 8 and 11 imposed reciprocal obligations, including rights of first offer and confidentiality obligations. The court would not assess the adequacy of that consideration.
3. The agreement was not void for uncertainty. Difficulty of construction, or the possibility of future litigation, did not prevent enforcement where the document imposed intelligible mutual obligations. The parties also intended to create legal relations, notwithstanding their unusual expectation that the document would operate as an insurance policy.
4. Settlement Agreement. The 2011 agreement was concluded and took effect on 6 August 2011. Objectively construed, the date written beside the relevant clause identified the date of entry into the agreement. Treating the missing date on the first page as creating an unmentioned escrow arrangement would be uncommercial.
5. The pleaded representations that the defendant would propose or honestly intend to pay compensation were not made. The court therefore did not need to decide falsity, reliance, inducement or fraud. Had those issues arisen, the court would have found that the defendant authorised General Kopelipa to convey his two settlement conditions, but did not authorise the pleaded representations. Apparent authority and reliance would also have failed because the claimant knew the written agreement’s terms and the defendant’s refusal to pay.
6. The 2011 settlement released all claims. The claim was dismissed. Costs and ancillary orders were reserved for further submissions.