Other Forms of Dispute Resolution - Scottish Construction Contracts - page 411

He had to go further though, since in the Interserve case there was a dispute clause
giving the English courts exclusive jurisdiction. To deal with this, he made a dis-
tinction between a dispute resolution clause (such as that in the sub-contract) and
an exclusive jurisdiction clause (such as that in the Agreement). He considered the
sub-contract dispute resolution clause was a self-contained regime for the resolution
of disputes. he exclusive jurisdiction clause supplemented that by making clear what
laws should apply to any arbitration but did not trump it by substituting a new forum
for disputes.
This is a surprising result. The Settlement Agreement provided not just for which
law was to apply but also for which forum had jurisdiction over the dispute. Here, the
courts were given exclusive jurisdiction. Normally, terms would not be implied where
they are in conflict with express terms and here there was a clear express term in the
Settlement Agreement which dealt with the method of resolving disputes under that
Agreement.
The practical advice, in the light of this, would be to ensure that intentions are fully
and clearly set out in any settlement agreement. In the unfortunate circumstances of
an agreement still giving rise to disputes, this should at least ensure that the dispute is
limitedtothesubstantiveissuesasopposedtoapreliminary(andpossibleexpensive)
skirmish over where the battle is to take place.
18.2.5 Multi-party settlements
The other issue arising in relation to settlements is in the context of a settlement
betweentwopartiesinacontractualchain,say,anemployerandcontractor,whereone
of the parties may have a related claim against a third party, possibly a sub-contractor.
The ideal situation in such circumstances would be for any settlement agreed to
involve all three parties. That would avoid any risk associated with the contractor
being stuck in themiddle withonedeal being agreedup thecontractualchain withthe
employer but ending up with a different deal down the line with the sub-contractor.
Wherethatisnotpossible,thereissomeguidancefromthecourtsonwhatthe
party in the middle requires to do and what it can do to protect itself.
In terms of proving liability, a settlement between two parties in the contractual
chain would not relieve a party from requiring to establish the liability of the third
party in any claim, see Fletcher & Stewart Limited v. Peter Jay & Partners (1976). he
settlement achieved will not help or hinder that process. As Geoffrey Laing LJ put it:
The nature and amount of any settlement negotiated previously to that between
the defendant and the plaintiff had nothing to do with the liability as between the
defendant and the third party. It might have been relevant on the amount of dam-
ages to be paid by the third party to the defendant once liability on the part of the
third party had been established.
In relation to quantum of the claim, the amount of any settlement previously made
may be relevant evidence of the amount recoverable, see Biggin & Co v .Permanite