Compagnie Noga v Abacha

Compagnie Noga D’Importation et D’Exportation v Abacha (No. 4) [2003] EWCA Civ 1100

Tripartite settlement agreement between parties not binding and an “agreement to agree”

Facts

The claimant Swiss company entered into a tripartite agreement with the defendant (the personal representative of the deceased former military leader of Nigeria) and the Nigerian Government which purported to settle a dispute between the parties. The claimant had originally commenced an action claiming that it had a beneficial interest in bills of exchange bought by the defendant and then sold by the defendant to the Nigerian Government.

Issues

The claimant appealed against an earlier decision which found that the tripartite agreement which purported to settle the dispute had not been intended to be binding and was rather conditional or an agreement to agree.

Decision/Outcome

The claimant’s appeal was dismissed (Laws, L.J. dissenting). The tripartite agreement had not been a binding contract. When considered against the background of the entire negotiations, the evidence relied upon by the claimant did not prove that clauses referring to a “settlement amount” should be taken to refer to the sum of $100m which was supposedly agreed orally at a later stage between the claimant and the defendant. Subsequent conduct of the parties also suggested that the agreement was not intended to be binding. Laws, L.J suggested that the settlement sum could be supplied by evidence of what was said at a stage when the parties were still in negotiation or had arrived at partial agreement. Waller, L.J. suggested that this approach did not work because the references to “a” settlement amount were deliberately inserted into the agreements because no final agreement had yet been reached between the parties.

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