International Transport Workers' Federation v Viking Line ABP
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Tuckey |
| Judgment Date | 03 November 2005 |
| Neutral Citation | [2005] EWCA Civ 1299 |
| Docket Number | Case No: A3/2005/1393(A) and 1393 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 November 2005 |
[2005] EWCA Civ 1299
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEENS BENCH DIVISION
COMMERCIAL COURT
Mrs Justice Gloster
2004 Folio 684
Lord Justice Waller
Lord Justice Mummery and
Lord Justice Tuckey
Case No: A3/2005/1393(A) and 1393
and A3/2005/1394(A) and 1394
Mark Brealey QC, Kassie Smith and Marie Demetriou (instructed by the Legal Department of the ITFfor the 1 st Appellant and Denton Wilde Sapte for the 2 nd Appellant)
Charles Hollander QC, Mark Hoskins and Colin West (instructed by Ross & Co) for the Respondents
Waller LJ:
This is an appeal from the decision of Gloster J given in a reserved judgment handed down on 16 th June 2005 following a trial lasting some 10 days in January and February of the same year. Viking Line ABP (Viking) a Finnish shipping line, were the successful claimants. Gloster J, in reliance on the free movement Articles, particularly Article 43 of the EC Treaty, by an order, a copy of which I append as a schedule to this judgment, granted Viking permanent injunctions restraining the Defendants, the Finnish Seamen's Union (the FSU) and the International Transport Workers' Federation (the ITF) from taking industrial action. The injunctions seek (1) to prevent the ITF and the FSU from taking industrial action to deter Viking from reflagging their ferry the Rosella from the Finnish flag to the Estonian flag, something they desire to do to take advantage of the cheaper labour costs of employing a crew from Estonia; and (2) to prevent ITF and the FSU from taking industrial action to persuade Viking that, even if it does reflag, it should continue to pay its crew at Finnish rates negotiated with the FSU. The industrial action and thus its threat would have been lawful under Finnish national law disregarding any impact of the EC Treaty. The judge held that the action threatened by the two trade unions imposed restrictions on the freedom of movement of establishment contrary to Article 43, (and indeed, in the alternative, the free movement of workers and the free provision of services contrary to Articles 39 and 49), and that it, and thus its threat, would be unlawful. The case accordingly raised and the appeal raises important issues relating to the interaction of the key provisions of the Treaty dealing with free movement and the fundamental rights of workers to take industrial action.
It is at first sight surprising that the English Commercial Court should be the forum in which a dispute between a Finnish company and a Finnish Trade Union and an international Trade Union concerned with a ferry running between Finland and Estonia should be litigated. But since the ITF's base is in London, jurisdiction was established pursuant to the Brussels Regulation ( Regulation (EC) 44/2001), and Gloster J ruled (and I think rightly) that comity did not require the English court to stay the proceedings to allow the case to be tried in what might be thought its more natural forum, the Finnish courts.
Gloster J furthermore did not refer the questions of European law to the European Court. Among her reasons for not so doing were that a reference would involve a considerable delay, and that she was clear about the answers. She accepted Viking's submission that if the industrial action was not prevented the damage to Viking would be so severe that it was important to reach a final conclusion.
Despite the full and able argument before us, unlike the judge, I am not clear as to the answers on the points of European law. It furthermore seems to me that the points which arise are of such fundamental importance that a reference is essential sooner rather than later. I would add that it also seems to me that even if comity does not require this court to stay the proceedings in favour of the Finnish courts, where it is being argued that European law renders actions unlawful in Finland which would otherwise be lawful by Finnish national law, the court best placed to receive all relevant submissions including those that the Finnish Government might wish to make is the European Court. That there may be a delay as a result of the reference is unfortunate, but hopefully the European Court will accept that there is urgency in dealing with the questions that arise, the points not only being important in the context of the parties to this case, but in the context of industrial relations generally.
The above points go to the making of the reference without any detailed consideration of the arguments, but, since Viking submit, as they did before Gloster J, that a reference should not be made without interim measures being granted in their favour, some consideration of the merits is necessary. Putting the matter broadly for the moment, they submit that it might take two years for the reference to be heard in the court in Luxembourg, and without interim measures granting injunctions in the form that Gloster J granted them, Viking will suffer irreversible damage – indeed they say that Viking might be forced to sell the Rosella and cease trading the ferry between Estonia and Finland, suffering serious losses, irrecoverable (they say) from the trade unions. Equally, of course, the FSU and ITF submit that with interim measures in place in the form that Gloster J made Viking will be able to carry out their intentions to reflag and employ a crew at rates negotiated with the Estonian trade union (the Transport Workers' Trade Unions' Federation), with the result that in two years' time it would be difficult to put the clock back, and in any event damages would never provide an adequate remedy.
Hopefully the two year delay will turn out to be a pessimistic assessment and the European Court will, in the exceptional circumstances of this case, give priority to it, but that there will be some delay cannot be denied.
The answer to the question as to how far this court should go in considering the merits of the case when contemplating whether interim measures should be granted is, as will be clear from the authorities to which I will turn, itself dependent on the answer to certain questions which I can put in this way:
(1) If Viking were granted interim relief but turned out ultimately not to be entitled to it, would damages be an adequate remedy for the trade unions?
(2) If Viking were refused interim relief at this stage and were ultimately held to be entitled to injunctive relief at the trial, would they be adequately compensated in damages by the trade unions?
If Viking were granted interim relief and ultimately held not to have been entitled to it, it seems to me that damages would not provide an adequate remedy. As set out in the Order of Gloster J, Viking have offered an undertaking not to terminate certain contracts. A similar undertaking has been offered in the form of order put in by Viking before us. But those undertakings do not require the renewal of short-term contracts with employees, nor do they prevent redeployment of employees to other jobs. Furthermore, once the present crew of the Rosella were replaced by a low-cost labour crew it would be difficult if not impossible to put the clock back. In any event, compensation to the defendant unions for jobs lost by individuals or for jobs no longer available to individuals would be difficult to calculate if recoverable at all.
If Viking were not granted interim relief and ultimately held to be right in their arguments, it seems to me that the recoupment of any loss in relation to whatever action Viking had taken in the intervening period (i.e. whether it sold the ferry or whether it continued to run it at a loss) has major difficulty. Those representing Viking suggest that there are doubts as to whether such damages would be recoverable in law at all submitting that there is no authority that holds that breaches of Article 43 give rise to a claim for damages. Those representing the unions acknowledge that lack of certainty, but, in my view, correctly suggest that the logic behind Lord Diplock's view, expressed in Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130 when dealing with contraventions of Article 86 (now Article 82), would apply. At p.144 between A and G he expressed the trenchant view that he regarded it as quite unarguable
"… that if such a contravention of Article 86 gives rise to any cause of action at all, it gives rise to a cause of action for which there is no remedy in damages to compensate for loss already caused by that contravention but only a remedy by way of injunction to prevent future loss being caused."
As he said:—
"A cause of action to which an unlawful act by the defendant causing pecuniary loss to the plaintiff gives rise, if it possessed those characteristics as respects the remedies available, would be one which, so far as my understanding goes, is unknown in English private law, at any rate since 1875 when the jurisdiction conferred upon the Court of Chancery by Lord Cairns' Act passed to the High Court. I leave aside as irrelevant for present purposes injunctions granted in matrimonial causes or wardship proceedings which may have no connection with pecuniary loss. I likewise leave out of account injunctions obtainable as remedies in public law, whether upon application for Judicial Review or in an action brought by the Attorney General ex officio or ex relatione some private individual. It is private law, not public law, to which the company has had recourse. In its action it...
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