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Merkur Island Shipping v Laughton

[1983] ICR 490

Case summary last updated at 17/02/2020 20:05 by the Oxbridge Notes in-house law team.

Judgement for the case Merkur Island Shipping v Laughton

P refused to comply with ITF’s demands to pay staff European rates, so ITF ‘blacked’ P’s ship, preventing it from leaving the harbour. P sought an injunction against the blacking action on the grounds of ‘unlawful interference with contractual performance by unlawful means’ (since P had a contract with X to charter the ship). HL granted the injunction, holding that this economic tort extended to the prevention of the due performance of a primary obligation in the contract, even if by reason of a force majeure clause the plaintiff was not obliged as a consequence to make monetary compensation by way of damages. There was evidence that the ITF knew of the charterparty and hence had procured the tugboat men and dockers etc to breach their employment contracts with P and prevent the charterparty from being fulfilled. NB P in this case did not rely on interference with contractual relations. 
 
Lord Diplock: He endorses the test used by Jenkins LJ for interference with contractual rights, which includes procuring a breach OR preventing performance etc. He says that the ‘unlawful means’ bit is satisfied by the fact that the tugboat operators etc were acting in breach of their contracts with P. He applies the 4-stage test of Jenkins LJ to interference with contractual performance (rather than interference with contractual relations/procuring breach). This satisfied: ITF knew of the agreement and intended to prevent performance, successfully procured P’s employees to breach their contracts and this led to the prevention of contractual performance by P. 

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