Marubeni 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 purely commercial contract to exclude the right of set-off. The court was concerned with a clause which incorporated the word ‘deduction’ with payment: ‘… without any deductions or withholdings whatsoever.’
Held: The words were not terms of art: ‘It is unlikely either could be described as a clear word. At the end of the day therefore, the question is one of construction in the context of the contract as a whole and it is to that I shall now turn.’ The right of set-off was excluded.


Waller J


Unreported, 17 May 1995


England and Wales


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 . .

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 . .
CitedBOC 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 . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Contract

Updated: 16 May 2022; Ref: scu.182577