SET OFF DEFENCE NOT AVAILABLE TO CLAIM FOR UNLIQUIDATED DAMAGES

Port of Tilbury (London) Ltd v Stora Enso Transport & Distribution Ltd [2009] EWCA Civ 16, 23 January 2009

In Port of Tilbury (London) Ltd v Stora Enso Transport & Distribution Ltd [2009] EWCA Civ 16, 23 January 2009, the Court of Appeal allowed an appeal from the decision of Mr Justice Ramsey (on which see our August/September 2008 issue, pp. 10–12) and held that the defendant was not entitled, under the terms of the contract, to set off its counterclaim for damages against the claimant’s claim for payment pursuant to a term of the contract. The contract provided that payment was to be made without set off, deduction or counterclaim. While the obligation to make payment without set off was stated to be subject to contrary express provision in the contract, the court found that there was no such express provision in the contract. The clause relied upon by the defendant was held, upon its proper construction, to entitle the defendant to withhold a sum otherwise allegedly due but also genuinely disputed and thus allegedly not due but that it did not extend to a set off arising from a counterclaim.