Given all the challenges that businesses face as a result of the Covid 19 pandemic and its impact on the global economy, the parties could take a consensual approach to creditor-debtor relations for the unique circumstances they face. In Guernsey, it is possible for a debtor and a creditor to reach a broad agreement on an agreement between them in the form of a status quo agreement on terms that any party can accept. The benefits, both for the creditors and for the debtor company, have already been well taken into account. In other words, status quo agreements suspend a temporary legal “freeze” on trade relations or at least the parts of the relationship that the parties agree to. However, the suspension should not be confused with the lifting of obligations. Contracting parties often enter into status quo agreements as they approach the expiry of a limitation period. This case shows the difference between the suspension of time and the lengthening of time for the purposes of the statute of limitations in a status quo agreement. With respect to interpretation, the Tribunal found that the status quo agreement had suspended time, so that the remainder of the limitation period continued after the expiry of the status quo agreement. Although the court does not deprive applicants of the possibility of (1) Stuart Howard Russell (2) Naomi Patricia Russell v (1) Peter Stone (2) PSP Consultants Limited (3) PSP Consultants Limited (3) PSP Consultants (a firm)   EWHC 1555 (TCC). Edward Murray (who sits as Deputy Judge of the Registry Division) approved BT and found that the recitals could and should be taken into account in the interpretation of an agreement and found that the suspensive period applied to each rate of duty only for a period of 12 months, unless a prior notification under Term 3 had terminated that period.
He found that the matrix of the underlying facts was irrelevant because “it was not necessary to depart from the natural meaning of the words used.” The status quo agreement resulted in the limitation period for the 2005 and 2006 claims expiring and these rights were prescribed, unless an agreement was reached. Prospective applicants should carefully consider their options as they approach the expiry of a limitation period. Coulson J. noted that status quo agreements are becoming more common and noted that he had “an overwhelming feeling that this may be just another self-inflicted complication.” He suggested that if the restriction is a problem and more time is needed to work on the application, complainants should instead consider proceeding within the statute of limitations and then apply for a stay.