LM-2025-000186 - [2025] EWHC 2098 (Comm)

Clause 2.1 of Annex A to the CTA provides as follows:

“2.1.3.

All payments shall be made without deduction or withholding and in immediately EUR.

2.1.4.

All payments shall be deemed to have been made on the date on which they are received in Lessor’s or Lessee’s bank account as applicable.

2.1.5.

Any set off or deduction is subject to written consent of Lessor and Lessee.”

It is not disputed that such clauses are in principle enforceable. As stated in Cargill International Trading v Uttam Galva Steels [2018] EWHC 2977 (Comm) at §18: “The purpose of such clauses is to ensure that sums which are otherwise due remain immediately due and payable notwithstanding that there may be other disputes between the parties; see Credit Suisse International v Ramot Plana OOD [2010] EWHC 2759 (Comm) at paragraph 43 per Hamblen J.” Under the terms of the Clause any set off needs the written consent of both parties. The provisions of the CTA, including Clause 2.1 of Annex A, are incorporated into each of the ASLAs (see Clause 2.1 of the ASLA).

There is only one set off (or group of set offs) in respect of which SLX EST say that written consent has been given by both parties. This is in respect of the sum of €141,168.02 which TUI BEL gave credit for in the calculations underlying the original claim at paragraph 41.2 of the Particulars of Claim, i.e. the claim for €555,902.63 in respect of TUI BEL’s Block Hours reconciliation claim against SLX EST. It appears from Mr Martens’ statement and further reconciliation work carried out by SLX EST that the credit applied of €141,168.02 consisted of three elements: (i) €37,609.38 in respect of invoices from SLX EST to TUI BEL; (ii) €21,840.15 in respect of invoices from SLX MAL to TUI BEL, and (iii) an unexplained balance of €81,178.

I do not consider that it is right to say (within the meaning of Clause 2.1.5) that there has been the written consent of the relevant Claimants and Defendants that these amounts should be set off against the amounts claimed. The position is that the Claimants offered to give credit for these sums, but then resiled from that offer in the context of the claims for the pleaded amounts no longer being pursued, and being replaced by the lower sums referred to above. I do however accept that the fact that TUI BEL was willing to give credit for these amounts indicates that there is a claim with realistic prospects of success that the amounts are due from the relevant Claimant to the relevant Defendant.

The other amounts which SLX EST or SLX LAT seek to set off, or raise by way of cross claim, are those set out in the Annex to the witness statement of Mr Adamaitis. This Annex summarises at the start the amounts said to be due to the individual Defendants from the individual Claimants, which are then detailed in the following pages. On the information provided to me there would seem to be a claim with realistic prospects of success that these sums are payable by the relevant Defendant to the relevant Claimant, and I did not understand TUI BEL or TUI NED to be suggesting otherwise.

The relevant figures for present purposes set out in Mr Adamaitis’s Annex are (i) €111,976.15 said to be owed by TUI BEL to SLX EST; (ii) €32,638.23 said to be owed by TUI NED to SLX LAT; (iii) €143,812.31 said to be owed by TUI NED to SLX EST, and (iv) €339,150.41 said to be owed by TUI AIR to SLX EST. According to the Annex there is no sum said to be owed by TUI BEL to SLX LAT. I have not been provided with a reconciliation between these sums and the sums comprising the €141,168.02 referred to above, but I understand that the amounts identified in Mr Adamaitis’s Annex include all sums said to be owed to the Claimants by the Defendants, and that therefore they would include the €141,168.02 as appropriate.

In the absence of written consent that these sums should be set off, I do not consider that any of these sums can be set off by way of defence to the present claims of TUI BEL and TUI NED. I do not however consider that Clause 2.1 of Annex A to the CTA prevents SLX EST or SLX LAT from seeking a stay of execution against the relevant Claimant in respect of any sum (up to the amount of the prospective cross claim) for which judgment is given against them. While the purpose of the Clause is to facilitate immediate payment of sums owing, it does not in terms prevent a stay of execution. In any event, the Clause does not exclude the Court’s power to stay in appropriate cases (albeit the terms of the agreement between the parties, and the purpose behind it, are relevant to the exercise of the Court’s discretion).

In my view, in all the circumstances, it would be appropriate to grant a stay of execution in respect of claims by TUI BEL or TUI NED where there are cross claims with realistic prospects of success against them by SLX EST or SLX LAT. Such a stay would be only in respect of the amount of the relevant cross claim, and would be subject to the relevant Defendant pursuing its cross claim(s) with due expedition, with liberty to the relevant Claimant to apply should it not do so. The primary reason why it is in my view appropriate for such a stay to be granted is because it appears from the information before me that the overall business between the parties has been conducted on the basis that there would ultimately be an overall reconciliation between each contracting party of sums going both ways between them. In the normal course, it would be expected that the claims and cross claims would be resolved at the same time.

As to the amounts in respect of which a stay should be granted: