Maclaine Watson & Company Ltd v International Tin Council

JurisdictionUK Non-devolved
JudgeLord Keith of Kinkel,Lord Brandon of Oakbrook,Lord Templeman,Lord Griffiths,Lord Oliver of Aylmerton
Judgment Date26 October 1989
Judgment citation (vLex)[1989] UKHL J1026-1
Date26 October 1989
CourtHouse of Lords
Australia & New Zealand Banking Group Ltd. Banque Indosuez Hambros Bank Ltd. TSB England and Wales Arbuthnot Latham Bank Ltd. Kleinwort Benson Ltd.
(Appellants)
and
Commonwealth of Australia and 23 Others
(Respondents)
Amalgamated Metal Trading Ltd. & Others J.H. Rayner (Mincing Lane) Limited
(Appellants)
and
Department and Trade and Industry (Representing the United Kingdom of Great Britain and Northern Ireland) and Others
(Respondents)
Maclaine Watson & Company Limited
(Appellants)
and
Department of Trade and Industry
(Respondents)
(Conjoined Appeals)
Maclaine Watson & Company Limited
(Appellants)
and
International Tin Council
(Respondents)

[1989] UKHL J1026-1

Lord Keith of Kinkel

Lord Brandon of Oakbrook

Lord Templeman

Lord Griffiths

Lord Oliver of Aylmerton

House of Lords

Lord Keith of Kinkel

My Lords,

1

I have had the opportunity of considering in draft the speeches prepared by my noble and learned friends Lord Templeman and Lord Oliver of Aylmerton. I am in entire agreement with the reasoning there set out and there is nothing which I can usefully add. I would accordingly dismiss all these appeals.

Lord Brandon of Oakbrook

My Lords,

2

For the reasons given in the speeches of my noble and learned friends Lord Templeman and Lord Oliver of Aylmerton I would dismiss all these appeals.

Lord Templeman

My Lords,

3

These appeals raise a short question of construction of the plain words of a statutory instrument. The trial judges (Staughton J. and Millett J.) and the Court of Appeal (Kerr, Nourse and Ralph Gibson L.JJ.) rightly decided this question in favour of the respondents. Losing the construction argument, the appellants put forward alternative submissions which are unsustainable. Those submissions, if accepted, would involve a breach of the British constitution and an invasion by the judiciary of the functions of the Government and of Parliament. The Government may negotiate, conclude, construe, observe, breach, repudiate or terminate a treaty. Parliament may alter the laws of the United Kingdom. The courts must enforce those laws; judges have no power to grant specific performance of a treaty or to award damages against a sovereign state for breach of a treaty or to invent laws or misconstrue legislation in order to enforce a treaty.

4

A treaty is a contract between the governments of two or more sovereign states. International law regulates the relations between sovereign states and determines the validity, the interpretation and the enforcement of treaties. A treaty to which Her Majesty's Government is a party does not alter the laws of the United Kingdom. A treaty may be incorporated into and alter the laws of the United Kingdom by means of legislation. Except to the extent that a treaty becomes incorporated into the laws of the United Kingdom by statute, the courts of the United Kingdom have no power to enforce treaty rights and obligations at the behest of a sovereign government or at the behest of a private individual.

5

The Sixth International Tin Agreement ("I.T.A.6") was a treaty between the United Kingdom Government, 22 other sovereign states and the European Economic Community ("the member states"). I.T.A.6 continued in existence the International Tin Council ("the I.T.C.") as an international organisation charged with regulating the worldwide production and marketing of tin in the interests of producers and consumers. By article 16 of I.T.A.6, the member states agreed that:

"1. The Council shall have legal personality. It shall in particular have the capacity to contract, to acquire and dispose of moveable and immoveable property and to institute legal proceedings."

6

Pursuant to the provisions of I.T.A.6, an Headquarters Agreement was entered into between the I.T.C. and the United Kingdom in order to define "the status, privileges and immunities of the Council" in the United Kingdom. Article 3 of the Headquarters Agreement provided that:

"The Council shall have legal personality. It shall in particular have the capacity to contract and, to acquire and dispose of moveable and immoveable property and to institute legal proceedings."

7

No part of I.T.A.6 or the Headquarters Agreement was incorporated into the laws of the United Kingdom but the International Tin Council (Immunity and Privileges) Order 1972 ( S.I. 1972 No. 120) made under the International Organisations Act 1968 provided in article 5 that: "the Council shall have the legal capacities of a body corporate."

8

The I.T.C. entered into contracts with each of the appellants. The appellants claim, and it is not disputed, that the I.T.C. became liable to pay and in breach of contract has not paid to the appellants sums amounting in the aggregate to millions of pounds. In these proceedings the appellants seek to recover the debts owed to them by the I.T.C. from the member states.

9

The four alternative arguments adduced by the appellants in favour of the view that the member states are responsible for the debts of the I.T.C. were described throughout these appeals as submissions A, B(1), B(2) and C.

10

Submission A relies on the fact that the Order of 1972 did not incorporate the I.T.C. but only conferred on the I.T.C. the legal capacities of a body corporate. Therefore, it is said, under the laws of the United Kingdom the I.T.C. has no separate existence as a legal entity apart from its members; the contracts concluded in the name of the I.T.C. were contracts by the member states.

11

Submission A reduces the Order of 1972 to impotence. The appellants argues that the Order of 1972 was only intended to facilitate the carrying on in the United Kingdom of the activities of 23 sovereign states and the E.E.C. under the collective name of "the International Tin Council." Legislation is not necessary to enable trading to take place under a collective name. The appellants suggested that the Order of 1972 was intended to enable the member states to hold land in the United Kingdom in the name of a nominee. Legislation is not necessary for that purpose either. The appellants then suggested that the Order of 1972 was necessary to relieve the member states from a duty to register the collective name of the I.T.C. and from complying with the other provisions of the Registration of Business Names Act 1916. This trivial suggestion was confounded when, at a late stage in the hearing, the Act of 1916 (now repealed) was examined and found not to apply to an international organisation established by sovereign states. The Order of 1972 did not confer on 23 sovereign states and the E.E.C. the rights to trade under a name and to hold land in the name of the I.T.C. The Order of 1972 conferred on the I.T.C. the legal capacities of a body corporate. The appellants submitted that if Parliament had intended to do more than endow 23 sovereign states and the E.E.C. trading in this country with a collective name, then Parliament would have created the I.T.C. a body corporate. But the Government of the United Kingdom had by treaty concurred in the establishment of the I.T.C. as an international organisation. Consistently with the treaty, the United Kingdom could not convert the I.T.C. into an United Kingdom organisation. In order to clothe the I.T.C. in the United Kingdom with legal personality in accordance with the treaty, Parliament conferred on the I.T.C. the legal capacities of a body corporate. The courts of the United Kingdom became bound by the Order of 1972 to treat the activities of the I.T.C. as if those activities had been carried out by the I.T.C. as a body incorporated under the laws of the United Kingdom. The Order of 1972 is inconsistent with any intention on the part of Parliament to oblige or allow the courts of the United Kingdom to consider the nature of an international organisation. The Order of 1972 is inconsistent with any intention on the part of Parliament that creditors and courts should regard the I.T.C. as a partnership between 23 sovereign states and the E.E.C. trading in the United Kingdom like any private partnership. The Order of 1972 is inconsistent with any intention on the part of Parliament that contracts made by the I.T.C. with metal brokers, bankers, staff, landlords, suppliers of goods and services and others, shall be treated by those creditors or by the courts of the United Kingdom as contracts entered into by 23 sovereign states and the E.E.C. The Order of 1972 conferred on the I.T.C. the legal capacities of a body corporate. Those capacities include the power to contract. The I.T.C. entered into contracts with the appellants.

12

The appellants submitted that if there had been no Order of 1972, the courts would have been compelled to deal with the I.T.C. as though it were a collective name for an unincorporated association. But the rights of the creditors of the I.T.C. and the powers of the courts of the United Kingdom must depend on the effect of the Order of 1972 and that Order cannot be construed as if it did not exist. An international organisation might have been treated by the courts of the United Kingdom as an unincorporated association if the Order of 1972 had not been passed. But the Order of 1972 was passed. When the I.T.C. exercised the capacities of a body corporate, the effect of that exercise was the same as the effect of the exercise of those capacities by a body corporate. The I.T.C. cannot exercise the capacities of a body corporate and at the same time be treated as if it were an unincorporated association. The Order of 1972 brought into being an entity which must be recognised by the courts of the United Kingdom as a legal personality distinct in law from its membership and capable of entering into contracts as principal. None of the authorities cited by the appellants were of any assistance in construing the effect of the grant by Parliament of the legal capacities of a body corporate to an...

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