This is an extract of our Williams And Humbert V. W H Trademark document, which we sell as part of our Conflict of Laws BCL Notes collection written by the top tier of Oxford students.
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HUMBERT V. W & H TRADEMARK
FACTS A company incorporated in England sues defendants in tort misfeasance and breach of fiduciary duty. The question is whether the plaintiff company, Williams and Humbert Ltd. ("Williams and Humbert"), is barred from relief in that action because the shares of the Spanish company, Rumasa S.A. ("Rumasa"), which holds all the issued shares of Williams and Humbert have been compulsorily acquired by the Spanish government. The second of these appeals, arises out of an action referred to as "the banks' action" whereby three companies incorporated in Spain sue defendants in tort and misfeasance. The question is whether the plaintiff companies, Rumasa, Banco de Jerez S.A. ("Jerez") and Banco del Norte S.A. ("Norte"), are barred from relief in that action because all their shares have been compulsorily acquired by the Spanish government. Expropriation by the Spanish Government: By a law dated 29 June 1983 enacted by the monarch and parliament of the Kingdom of Spain and taking effect on 30 June 1983, all the issued shares of Rumasa and of the subsidiary companies of Rumasa incorporated in Spain, including the shares of Jerez and Norte, were compulsorily acquired by the Spanish government. By the same law control of the management of Rumasa, Jerez and Norte and the other Spanish subsidiaries of Rumasa, vested in the general board of state ownership. Thus the Spanish government now owns the shares in and controls Rumasa, Jerez and Norte, while Rumasa controls Williams and Humbert. Diversion of trademark in breach of fiduciary duty: The representatives of the Spanish government now charged with the management of the Rumasa group allege that while the Mateos family controlled Williams and Humbert through Rumasa, the Dry Sack trade mark was improperly diverted from Williams and Humbert to a company incorporated in Jersey and formed for the benefit of the Mateos family. The Spanish government have in the circumstances caused Williams and Humbert, as plaintiffs, to institute the present trade marks action in the Chancery Division of the High Court of Justice of this country against the Jersey company and against members of the Mateos family as defendants, for the recovery of the trade mark and for the payment of damages. Appellant's defence: The appellants now seek to put forward an alternative defence. Even if the appellants, or some of them, have been guilty of misappropriation, breach of trust, misfeasance or other wrongs inflicted on Williams and Humbert or Jerez, nevertheless according to the defence which the appellants now seek to plead, Williams and Humbert as plaintiffs in the trade
marks action and Rumasa, Jerez and Norte, as plaintiffs in the banks' action: "are not entitled to the relief sought or any relief by reason of the fact that the proceedings represent an attempt to enforce a foreign law which is penal or which otherwise ought not to be enforced by this court and further, or alternatively, that it would be contrary to public policy to grant the relief sought or any relief." Nourse J. after hearing arguments which spanned seven working days concluded that the answer was obvious and that the ownership of the plaintiffs' shares in each action was irrelevant. HOLDING No rule against recognition of compulsory acquisition This pleading could be justified if English law abhorred the compulsory acquisition legislation of every other country, or if international law abhorred the compulsory acquisition legislation of all countries. But in fact compulsory acquisition is universally recognised and practised. In the United Kingdom, the courts are bound to accept and enforce any compulsory acquisition authorised by the United Kingdom parliament and to recognise compulsory acquisitions by other governments subject only to limitations for the safeguarding of human rights. In the present case, the Spanish government acquired all the shares in Rumasa and Jerez. Ownership of the shares in Williams &
Humbert was and remained vested in Rumasa. Ownership of any right of action to recover the Dry Sack trade mark and to recover damages was and remained vested in Williams and Humbert. Ownership of any right of action to recover $46 million was and remained vested in Jerez. These authorities illustrate the principle that an English court will recognise the compulsory acquisition law of a foreign state and will recognise the change of title to property which has come under the control of the foreign state and will recognise the consequences of that change of title. The English court will decline to consider the merits of compulsory acquisition. In their pleadings the appellants seek to attack the motives of the Spanish legislators, to allege oppression on the part of the Spanish government and to question the good faith of the Spanish administration in connection with the enactment, terms and implementation of the law of the 29 June 1983. No English judge could properly entertain such an attack launched on a friendly state which will shortly become a fellow member of the European Economic Community.
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