John Charman will remain on gardening leave until next year.
The former group president and chief executive of Ace International had been dismissed from Ace in March following "differences over personnel matters".
But Charman intended to oversee the run-off of Lloyd¹s insurer Newmarket. He had also been appointed chief executive of Axis Specialty, Marsh & McLennan's new US$1bn (£680.4m) insurance and reinsurance operation.
On 1 October, Ace filed a writ to prevent Charman from working in the market for a year after he left the company.
An Ace spokesperson said: "There has been a legal dispute between ACE Group and Mr Charman over recent weeks regarding certain restrictive covenants to which Mr Charman is subject until 17 March 2002.
"The litigation has now been settled on agreed terms and the court has made an order accordingly.
"ACE is pleased to note that Mr Charman has given undertakings to the court reflecting the terms of his contract. Mr Charman confirms that, as he has
always said, he will comply with the terms of the covenants."
