Visa v Luxottica Retail: A cautionary tale on broadly drafted settlement agreements

The recent High Court case Visa Inc and others v Luxottica Retail UK Ltd [2026] EWHC 615 (Comm), demonstrates the need for caution when drafting settlement agreements, the importance of carefully considering the meaning of the words used and their potential consequences.

In this case, a company that acquired one of the parties to a settlement agreement, was prevented from pursuing a £10million claim against the other party to the settlement agreement, because of the breadth of the wording.

Facts

In 2017, Luxottica Retail UK Ltd (“Luxottica”) issued a claim against Visa, alleging that artificially high multilateral interchange fees (“MIFs”) charged by Visa breached competition law.

The claim form was never served (meaning that the time for providing an acknowledgment or service and a defence did not start running), and the parties instead entered settlement negotiations.

Settlement discussions were successful, and an agreement was entered into (in October 2020), under which Visa agreed to pay Luxottica the sum of £200,000.

The settlement agreement defined “Settled Claims” as comprising both 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.”

Separately, in June 2018, GrandVision NV (“GrandVision”) had issued a similar MIF claim against Visa valued at £10 million. GrandVision, at that time, had no connection to Luxottica.

However, in July 2021, GrandVision was acquired by EssilorLuxottica SA (“Essilor”), which was Luxottica’s parent company.

After the acquisition, Visa argued that, since GrandVision has been acquired by Essilor, the £10million claim by GrandVision against Visa fell within the definition of a “Settled Claim” and therefore the settlement agreement made between Luxottica and Visa in October 2020 compromised the dispute with GrandVision.

GrandVision denied this, contending that such an interpretation was “absurd,” as GrandVision had not been a subsidiary of Essilor at the time the agreement was signed.

Outcome

The court was asked to determine the interpretation of a “Claimant Associated Company” which was not separately defined within the settlement agreement, and whether GrandVision’s claim was therefore caught within the scope of the “Settled Claims”.

Applying established principles of contractual interpretation, the court determined the meaning of the words in their proper context.

This involved considering what a reasonable observer would understand both parties to have known, while avoiding “idiosyncratic speculation”—that is, interpretations based on personal or unique assumptions rather than a shared, common-sense understanding.

While the court accepted that the primary objective of the agreement was to settle Luxottica’s existing claim, it also found a clear secondary objective was to resolve other MIF-related claims more broadly.

Although “Claimant Associated Company” had not been expressly defined in the settlement agreement, the court interpreted it consistently with the concept of associated companies under the Companies Act 2006, namely, companies within the same corporate group. On that basis, Luxottica and GrandVision were associated companies by virtue of both being subsidiaries of Essilor.

The definition of “MIF-Related Claims” was drafted in particularly wide terms, covering claims “of any nature whatsoever in any jurisdiction, whether past, present or future, whether known or unknown.” Furthermore, the definition of “Settled Claims” included claims that a party “may have.” This was interpreted as extending to those claims that are both “presently possible” and also in the “future”, including those not known or contemplated at the time the settlement agreement was signed.

The court concluded that an objective reader would view this wording as deliberately broad, extending to claims involving companies that later became associated with Luxottica.

Accordingly, the court held that the claim by GrandVision fell within the definition of “Settled Claims” in the settlement agreement. It therefore found that the settlement agreement obliged GrandVision to withdraw its £10million claim and indemnify Visa for the costs it had incurred defending the proceedings.

Why is this important?

This judgment provides a cautionary reminder to take care when negotiating and entering into settlement agreements. The court is willing to enforce broadly worded provisions, even where this leads to significant and unexpected consequences. Accordingly, those entering into settlement agreements should adopt a forward-looking approach, carefully scrutinising the language used and anticipating how it may be applied or interpreted in future scenarios.

Ensuring clear and precise drafting, particularly in defining the scope of the agreement, can help avoid costly and unintended outcomes later.

If you have any questions about settlement agreements or you are in the process of considering terms proposed by another party, please contact our expert team at Thomson Snell & Passmore LLP for advice on this subject.