BOC Group Plc v Centeon Llc and Centeon Bio-Services Inc: CA 29 Apr 1999

The court was asked whether a clause in a share sale agreement setting out the payment obligation worked to preclude the purchaser from exercising a right of set-off when the time comes to pay a later instalment of the price.
Held: The appeal was dismissed. The right of set-off had effectively been excluded. ‘The meaning of general words, even ‘whatsoever’, may be limited by the context in which they appear. They may be used to refer to a class or category, a genus (or what Mr Pollock called a tribe) of which some but not necessarily all the members are identified in the clause. ‘ and ‘the hypothesis that the parties intended to exclude rights of set-off can be tested in this way: what words might they have used to make their meaning clear? There is not necessarily a magic formula, but words such as ‘payment in full without deduction or withholding of any sort’ are all familiar in contexts such as this. The failure of the parties to use any such words amounts to an eloquent silence. But this is not determinative of the meaning which the parties did in fact use. The phrase used, that is to say ‘not affected by … whatsoever’ does tend to include rather than exclude. That is to say, in the present case tends towards meaning that the payment of the full amount due shall not be affected in any way.’


Evans LJ, Brooke LJ


[1999] EWCA Civ 1293, [1999] 1 All ER (Comm) 970


England and Wales


CitedSmith v UMB Chrysler (Scotland) Ltd HL 9-Nov-1977
The principles set out in Canada Steamship apply to ‘clauses which purport to exempt one party to a contract from liability’. The principles should be applied without ‘mechanistic construction’.
Lord Keith of Kinkel said: The tests were . .
CitedContinental Illinois National Bank and Trust Company of Chicago v John Paul Papanicolaou (The Fedora) CA 1986
The court considered the effect of a guarantee clause.
Held: The provisions of the guarantee went to timing and cash flow rather than liability. A term excluding a right of set-off is not to be treated in the same way as an exclusion clause. . .
CitedCoca-Cola Financial Corporation v Finsat International Ltd and Others CA 1-May-1996
Party may contract out of right of set-off. Issue justiciable under Order 14. . .
CitedMottram Consultants Ltd v Bernard Sunley and Sons Ltd HL 1975
Stone panels which had been fixed to the external walls of a school fell off, owing to defective fixing by the contractor.
Held: The contractor was liable for the cost of reinstating the stone panels, calculated at the date when the defect was . .
CitedInvestors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
CitedWRM Group Limited (Formerly Known As WRM Logistics Limited) v Wood; Burcher; Wood; Chick and Irving CA 21-Nov-1997
Breach of share sale agreement. . .
CitedSociety of Lloyd’s v Leighs; Lyon and Wilkinson and Canadian Names Intervenors CA 31-Jul-1997
. .
CitedLarsen v Sylvester HL 1908
A vessel was delayed by congestion for 9 days whilst waiting to load; she then loaded within the 84 hours allowed as laytime. The charterparty contained an exceptions clause which stated: ‘the parties hereto mutually exempt each other from all . .
CitedChandris v Isbrandtsen-Moller Co Inc CA 1950
The court considered whether an arbitrator could award interest in circumstances where section 3 of the 1934 Act expressly conferred such a power on ‘the court’ in proceedings tried in a ‘court of record’.
Held: Although section 3(1) of the . .
CitedTor Line AB v Alltrans Group of Canada (The ‘TFL Prosperity’) HL 1984
A roll-on roll-off liner tendered under a charter party did not conform to the description in the contract and the owners relied on a widely drawn exclusion clause.
Held: The owners’ argument failed. A literal interpretation would have . .
CitedConnaught Restaurants Ltd v Indoor Leisure Ltd CA 17-Sep-1993
The lease provided the tenant would pay the rent ‘without any deduction’.
Held: The words ‘without any deductions’ in a lease were ambiguous and were insufficient to exclude the tenant’s right to claim a set off. Clear words are needed before . .
CitedMarubeni Corporation v Sea Containers Ltd ComC 17-May-1995
Procedure – set-off – contract for supply of containers – construction of contract – clear words to exclude right of set-off – equitable set-off – abatement – defective containers. The words ‘without deduction’ have been held in the context of a . .
CitedBeaufort Developments (NI) Limited v Gilbert-Ash NI Limited and Others HL 26-Feb-1998
The contractual ability given to an arbitrator under standard JCT terms did not oust the court from assessing and prejudging the acts of the architect under a building contract. As to the means for interpreting documents, Lord Hoffmann said: ‘I . .

Cited by:

CitedEdlington Properties Limited v J H Fenner and Co Limited CA 22-Mar-2006
The landlord had assigned the reversion of the lease. There was an outstanding dispute with the tenant defendant who owed arrears of rent, but sought to set these off against a claim for damages for the landlord’s failure to construct the factory in . .
Lists of cited by and citing cases may be incomplete.

Contract, Equity, Company

Updated: 30 May 2022; Ref: scu.146208