Universe Tankships Inc of Monrovia v International Transport Workers’ Federation (The Universe Sentinel) [1983] 1 AC 366

KEY POINTS

• Economic duress is one wherein (Lord Diplock):

Apparent consent was induced by pressure exercised upon 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.

• The act of compelling someone to surrender property or money through economic duress is not inherently a tort. The nature of the duress involved may or may not constitute a tort.

• The legal recourse resulting from economic duress is not a claim for damages; instead, it involves seeking restitution of the property or money obtained under duress and the annulment of any contract induced by it.

• However, if the specific form of economic duress employed qualifies as a tort in itself, the plaintiff has the option to pursue a restitutionary remedy for money received by the defendant on the plaintiff's behalf as an alternative to pursuing a tort action for damages.

FACTS

• The crew of the "Universe Sentinel" was employed at rates of pay lower than those insisted upon by the International Transport Workers' Federation (ITF). The ITF had a Collective Agreement specifying certain pay and employment conditions for seafarers.

• In July 1978, the "Universe Sentinel" was on a time charter to Texaco and arrived at the Texaco terminal in Milford Haven to discharge its cargo.

• Upon arrival, a representative of ITF handed the ship's master a document outlining the conditions to be fulfilled before flag-of-convenience vessels could be issued with ITF Blue Certificates. These certificates exempted vessels from ITF's blacking policy.

• The ship faced delays due to a blacking by tugboat crews. To lift the blacking, the Shipowners agreed to pay $80,000 to the ITF and entered into two agreements: a Special Agreement and a Typescript Agreement. The Special Agreement aimed to regulate the employment conditions of all seafarers aboard the ship.

• Subsequently, the Shipowners sought to set aside the payment to the welfare fund, claiming economic duress. They argued that the actions of the ITF were not lawful under Section 13 of the Trade Union and Labour Relations Act 1974. Additionally, they contended that the welfare fund constituted an invalid trust, implying that the ITF held the payment on a resulting trust for the Shipowners.

JUDGEMENT

• Appeal dismissed.

COMMENTARY

• This case sets important legal principles regarding economic duress, emphasizing the restitutionary nature of the remedy and the nuanced consideration of whether the specific form of duress constitutes a tort.

• It highlights the importance of analyzing the circumstances surrounding economic duress claims in contract and tort law contexts.

RELATED CASES

• R v Attorney General of England and Wales