Universe Tankships of Monrovia v International Transport Workers Federation, [1982] 2 All ER 67, HOL
Citation:Universe Tankships of Monrovia v International Transport Workers Federation, [1982] 2 All ER 67, HOL
Rule of thumb:Where one party is cornered and entrapped and then asked to make a payment, can they get this back? Yes, this can be reduced based upon duress/coercion.
Background facts:
The facts of this case were that Universe Tankships were at sea and ended up in a port controlled by the ITWF. They owed the ITWF money and there was a dispute over this. The ITWF closed the gates at the part of the port that the Universe Tankships were in. The ITWF stated that Universe Tankships were not getting out unless they paid and agreed to the conditions. Universe Tankships had to get out of the port to complete the job on time they were doing - they therefore paid the ITWF the money owed so they could escape.
Parties argued:
Universe Tankships later argued that they wanted this money returned. They argued that this constituted entrapment which was illegal. ITWF argued that this constituted a form of lien and was a right that they were allowed to exercise.
Judgment:
The Court held that this was not a valid debt collection exercise being practiced by the ITWF. They argued that they broke the law in doing this debt collection practice and it was duress. Proper debt collection procedures in accordance with insolvency law or otherwise have to be followed as underhand, havey-handed or illegal ones may well constitute duress. Universe Tankships won the case were entitled to the return of the money they owed and no terms and conditions they agreed to were valid.
Ratio-decidendi:
‘his apparent consent was induced by pressure exercised on him by that other party which the law does not regard as legitimate, with the consequence that the consent is treated in law as revocable unless approbated either expressly or by implication after the illegitimate pressure has ceased to operate on his mind’, Lord Diplock, 'pressure exercised on him by the other party which the law does not regard as legitimate', Lord Diplock
'lack of any practicable choice but to submit’ – Lord Scarman
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.