Key takeaways
Exercise caution when defining release scope in settlements
Caution is required when drafting wording delineating the intended scope of releases in settlement agreements.
Apply extra care and judgement to future acquisitions
Particular thought and care is required around future acquisitions.
Professional advice makes sharp practice arguments harder to sustain
Where parties gave been professionally advised more difficult to argue there has been sharp practices used.
In Visa Inc and others -v- Luxottica Retail UK Ltd [2026] EWHC 615 (Comm), the court considered a settlement agreement which had settled claims for £200,000 but held that it also extended to future claims of future associated companies of the defendant, including a claim for more than £10 million by a company in which the defendant's parent company had acquired a controlling interest some months after the original settlement agreement was executed.
The judgment provides an important reminder of the need for caution when drafting clauses setting out the intended scope of any releases in a settlement agreement.
Facts
The claimant, Luxottica Retail UK Ltd (Luxottica), is part of a large corporate group which sells eyewear and which and accepted credit/debit card payments directly and through concessions at department stores in the UK, Jersey, and Ireland. The defendants (VISA) operated the Visa card system, and set multilateral interchange fees ('MIFs'). When a retailer accepts a card payment from a customer, its bank pays a MIF to the bank that issued the card. There has been much litigation in recent years claiming that these MIFs are anti-competitive and in breach of competition law.
Luxottica issued a claim form in the High Court, claiming damages for MIFs it had paid. That claim form was never served but it led to settlement discussions and ultimately a written settlement agreement was agreed in October 2020.
Separately, a then-unrelated company, GrandVision NV ('GrandVision') and other entities, had also begun its own MIF claim against Visa claiming £10 million. In mid-2019, Luxottica's parent company had agreed in principle to acquire a controlling interest in GrandVision. That acquisition completed in July 2021, after the Luxottica/Visa settlement agreement. A few months later, Visa informed Luxottica that the settlement agreement had, thanks to GrandVision's acquisition by the Luxottica group, also settled GrandVision's claims. Visa commenced proceedings against Luxottica to obtain the withdrawal of the claims.
Key provision in the Settlement Agreement
Recital D defined 'Settled Claims' as comprising Luxottica's High Court claim and 'any and all other MIF-Related Claims...that the Claimant and/or any Claimant Associated Company have or may have'.
This meant that the definition of Settled Claims was very wide and covered known and unknown claims, present and future claims and was not limited to claims existing at the date of the settlement or only to Luxottica entities.
Judgment
The court held that the settlement agreement obliged Luxottica to ensure that Grandvision's claims, for more than £10 million, were withdrawn and to indemnify Visa for them.
The judge concluded that the relevant provisions covered claims other than those relating to Luxottica's own business and claims by companies that only became Associated Companies after the agreement was executed, even if such claims were known to both parties at the date of the settlement agreement.
One of Luxottica’s arguments in defence was that it was simply 'absurd' that a previous settlement would cover unforeseeable claims from future acquisitions. The judge did not agree finding that the settlement agreement was comprehensive and included 'unknown' future claims, ordering that GrandVision's claims should have been withdrawn.
The court also rejected Luxottica's argument that Visa had acted unfairly/using sharp practices, noting that both parties were professionally advised and the agreement was meant to settle all known and unknown claims.
The Court did not have to stray into the realms of implying terms, it simply applied straightforward principles of contractual interpretation.
Points to note
This judgment provides a salutary reminder of the need for caution when drafting wording delineating the intended scope of releases in settlement agreements. Time and again, parties have been caught out by failing to anticipate events, particularly around future acquisitions which mean they have made significant and unnecessary concessions. It will be very difficult where parties gave been professionally advised to succeed in an argument that there has been sharp practice by one of the parties.
For further information on this topic, please contact Moya Clifford.
