As Phillips LJ noted at the start of his judgment in Maranello Rosso Ltd v Lohomij BV,1 “[t]his appeal raises the familiar issue of whether an agreement for the settlement of ‘all and any claims’ between the parties (whether or not known to them at the time), had the effect of compromising claims in fraud and dishonesty (and, in the present case, conspiracy), notwithstanding that claims of that nature were not expressly mentioned in the agreement”. The Court of Appeal sensibly upheld the excellent decision of HHJ Keyser QC at first instance,2 and insisted that such claims were covered by the general words of the settlement. This is welcome. It must be possible to compromise claims in fraud without having to resort to express words mentioning “fraud”; as Lord Leggatt put it recently in Barton v Morris,3 “life is too short to negotiate contract terms designed to cover every contingency that may occur”. Although the meaning of any individual compromise agreement will depend upon the precise language used in its particular context, Maranello Rosso serves as an important counter-point to earlier decisions which had been sceptical about whether a general release can be construed to encompass claims of fraud. In addition, the reasoning both at first instance and on appeal may cast a degree of doubt upon some of the “principles” raised in Bank of Credit and Commerce International SA v Ali 4 as regards compromise agreements. Sufficient time may now have passed for that difficult decision of the House of Lords to be considered ripe for re-evaluation.

Maranello Rosso Ltd (“MRL”) purchased a collection of classic cars, including 33 Ferraris and 38 Abarths, for €80m. MRL also entered into an agreement with an auction house (“Bonhams”) regarding the sale of the cars, and expected to make a substantial profit of around €70m. Bonhams proposed raising finance for the transaction from the Louwman Group. MRL consequently executed a facility agreement with a company within the Louwman Group (“Lohomij”) under which Lohomij would provide MRL with a loan facility of €90m, and in return MRL agreed to pay Lohomij an arrangement fee of €10m, fixed interest of €3.6m, and to sell the cars through Bonhams.