Universe Tankships Inc. of Monrovia v International Transport Workers Federation (Marine)

JurisdictionUK Non-devolved
JudgeLord Diplock,Lord Cross of Chelsea,Lord Russell of Killowen,Lord Scarman,Lord Brandon of Oakbrook
Judgment Date01 April 1982
Judgment citation (vLex)[1982] UKHL J0401-1
Date01 April 1982
CourtHouse of Lords
Universe Tankships Incorporated of Monrovia
(Appellants)
and
International Transport Workers' Federation and Others
(Respondents)

[1982] UKHL J0401-1

Lord Diplock

Lord Cross of Chelsea

Lord Russell of Killowen

Lord Scarman

Lord Brandon of Oakbrook

House of Lords

Lord Diplock

My Lords,

1

The facts that gave rise to this action, brought by the appellants ("the Shipowners") as owners of the Liberian tankship "Universe Sentinel" against the respondent trade union (ITF), present no novelty. They afford a typical example of the application by ITF and the affiliated national trade unions who are its members, of the policy of "blacking" vessels sailing under what ITF regards as "flags of convenience" unless the owners of the vessel comply with ITF's demands as to the rates of pay and other terms of employment of the crew and as to various other matters to which it will become necessary to advert in detail.

2

Other examples of the way in which the blacking of fiags-of-convenience vessels is carried out are to be found in the judgments in The "Camilla M." [1979] 1 Lloyd's Rep. 26 and N.W.L. Ltd. v. Woods [1979] 1 W.L.R. 1294, where the object sought to be achieved by the blacking policy and the reasons why it does not always command the support of the crews of vessels to which it is applied, are also discussed. Both of these, however, were cases in which an interlocutory injunction was sought by shipowners against trade union officials to restrain them from committing the tort of inducing port workers to break their contracts of employment by preventing or refusing to assist in enabling the blacked vessel to leave port; and the only issue of law before the court was whether the defendants were likely to establish that they were entitled to immunity from suit in tort by virtue of section 13(1) of the Trade Union and Labour Relations Act 1974—an issue that was decided in favour of the trade union officials by this House in N.W.L. Ltd. v. Woods. In those two cases it was necessary to identify the nature of the demands that ITF was making upon the shipowner as the price for obtaining the lifting of the blacking, but it was not necessary to examine the means by which compliance with those demands would be effected if the shipowner found himself compelled to succumb to them.

3

What is novel in the instant case is that the action was brought after the Shipowners did succumb and is not brought in tort, but is an action to recover from ITF part of the moneys paid by them to ITF in order to have the blacking of their vessel lifted so as to enable it to leave the port of Milford Haven. Although a substantially larger sum was claimed in the courts below (with partial success), the only part of the Shipowners' claim which is the subject of appeal to your Lordships' House, relates to a sum of $6,480 paid as a contribution to a so-called Welfare Fund administered by ITF. This sum is sought to be recovered on one of two alternative grounds: the first is that it is the subject of a resulting trust in favour of the Shipowners, since the trusts upon which it was received from them by ITF were void; the second is that it is recoverable from ITF as money had and received, since it was exacted by subjecting the Shipowners to economic duress. To determine whether the Shipowners can succeed on either of these grounds calls for a close consideration of the contemporary documents relating to the payment, and of the rules of the Welfare Fund.

4

My Lords, the judgment of Parker J. in the Commercial Court and that of the Court of Appeal (Megaw, Brightman and Watkins L.JJ.), delivered by Lord Justice Megaw, appear consecutively in the report of the instant case [1980] 2 Lloyd's Rep. 523. Both judgments set out the facts briefly and contain lengthy quotations from the relevant documents; but in view of the division of opinion between your Lordships as to what ought to be the fate of this appeal, I see no way of avoiding repetition of the greater part of such quotations here.

5

The Shipowners are a Liberian company. The tankship which they owned, "Universe Sentinel," was of 269,092 tons d.w.t.: the crew consisted in the main of Asians employed at rates of pay substantially less than those upon which ITF insists, and are provided for in what it calls the ITF Collective Agreement. In July 1978, "Universe Sentinel" was on time charter to Texaco and arrived on 17th July at the Texaco terminal at Milford Haven to discharge her cargo there. On her arrival the Master was handed, by a representative of ITF, a copy of a standard form of document headed:

"Conditions to be fulfilled before flag-of-convenience vessels can be issued with ITF Blue Certificates".

6

An ITF Blue Certificate, though this is nowhere spelt out in the documents, is well understood by shipowners, charterers and shippers, and by the constituent trade unions of ITF, to exempt a vessel sailing under a flag of convenience from being subject to the blacking policy of ITF. These conditions refer to a Special Agreement which it will be necessary to refer to in some detail, but the only extract from the conditions themselves which requires to be reproduced is paragraph 3:

"3. The Special Agreement also covers the owners' contributions to the Seafarers' International Welfare, Protection and Assistance Fund. The contributions are US$162.— per man per year. The Fund was set up to help provide welfare, social and recreational facilities in ports around the world for seafarers of all nations, especially those serving in flag-of-convenience ships, and is administered by an international committee of representatives of ITF-affiliated unions."

7

Parker J. placed considerable reliance on these words in deciding what I shall refer to as the trust point in the Shipowners' favour; but, for reasons which will appear, I think that he was wrong in doing so.

8

The "Universe Sentinel" finished discharging on 18th July, but because of being blacked by tugboat crews, she was prevented from sailing until 29th July, when the blacking was lifted in consequence of a meeting held at the offices of ITF in London on the previous day between representatives of the Shipowners and officials of ITF at which the Shipowners yielded to the demands of ITF that they should pay to ITF the sum of $80,000 and enter into two agreements with ITF, viz.: one headed "Special Agreement" on a standard printed form and the second in typescript ("the Typescript Agreement").

9

The Special Agreement, after setting out the parties, viz. the Shipowners, therein called "the Company", and ITF, starts with recitals:

"WHEREAS:

1. the ITF is an independent trade union organisation comprising fully autonomous trade union organisations in transport and allied services throughout the world and members of the Special Seafarers' Section of the ITF;

2. the Company is the registered owner/manager of the Ship; described in Schedule 1 hereto;

3. the ITF and the Company desire to regulate the conditions of employment of all seafarers (hereinafter individually called a 'Seafarer') serving from time to time aboard the Ship;".

10

I pause to say that recital 1 is not strictly accurate. Under its constitution membership of ITF is restricted to trade unions; there are no personal members; but in return for what is called an entrance fee and annual membership fee to what it describes as the Special Seafarers' Section (or Department), ITF does issue to seamen, who are not members of a national trade union affiliated to ITF, a membership card which entitles the holder to request assistance from any such affiliated trade union in whatever country he may find himself in need of it.

11

Article 1 of the Special Agreement needs to be set out in full:

"The Company undertakes as follows:

  • a to employ each Seafarer in accordance with the terms of the current ITF Collective Agreement for World Wide trading (hereinafter called the ITF Collective Agreement) as amended from time to time in accordance with Article 5 below;

  • b to incorporate the terms and conditions of the ITF Collective Agreement into the individual contract of employment of each seafarer and into the Ship's Articles and furnish copies of these documents to the ITF. Any seafarer, enjoying terms and conditions which are, taken as a whole, recognised by the ITF as more favourable to the seafarer, shall continue to enjoy such terms and conditions;

  • c to pay on behalf of each Seafarer contributions and fees at the rates shown in Schedule 2 hereto to the Seafarers' International Welfare Protection and Assistance Fund and to the Special Seafarers' Section of the ITF. The contributions and fees shall be paid to the ITF annually and in advance;

  • d to display aboard the Ship copies of the Special Agreement, the ITF Collective Agreement and the ITF Blue Certificate to be issued under Article 2 hereof in a prominent place to which each Seafarer shall have access at all times; and

  • e to grant to representatives of the ITF and of trade union organisations affiliated to the ITF free access to each Seafarer at all reasonable times whether or not aboard the Ship, whether the ship is in berth or not."

12

Articles 2, 3 and 4 deal with the issue and withdrawal of the Blue Certificate; while Article 5 entitles ITF, upon giving two months' notice, to change the rates of pay in the Collective Agreement and the rates of entrance and membership fees to the ITF Special Seafarers' Section and of contributions to the Welfare Fund referred to in Article lc and set out in Schedule 2. Schedule 2 itself is as follows:

"ITF SPECIAL SEAFARERS' SECTION

Entrance fees … …

40 at US$15 per man US$…………

Membership fees … …

40 at US$30 per man US$ per year……… per year

SEAFARERS' INTERNATIONAL WELFARE PROTECTION AND ASSISTANCE FUND

40 at US$162 per man US$………… per year

TOTAL

US$8.280.—

The sum of US$ …………is equivalent to…………

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3 firm's commentaries
  • Sign This Or Else! Economic Duress Under Bermuda Law
    • Bermuda
    • Mondaq Bermuda
    • 13 February 2017
    ...and evidence, and as the English House of Lords held in Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366, per Lord Scarman: "The classic case of duress is ... not the lack of will to submit but the victim's intentional submission arising from t......
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    ...was authoritatively recognised by the House of Lords in Universe Tankships Inc of Monrovia v International Transport Workers' Federation [1983] AC 366, and again a decade or so later in Dimskal Co SA v International Transport Workers Federation [1992] 2 AC 152. In all those cases the illegi......
  • The Final Word On Lawful Act Duress?
    • United Kingdom
    • Mondaq UK
    • 19 November 2021
    ...was authoritatively recognised by the House of Lords in Universe Tankships Inc of Monrovia v International Transport Workers' Federation [1983] AC 366, and again a decade or so later in Dimskal Co SA v International Transport Workers Federation [1992] 2 AC 152. In all those cases the illegi......
21 books & journal articles
  • Restitution
    • Singapore
    • Singapore Academy of Law Annual Review No. 2008, December 2008
    • 1 December 2008
    ...duress is actionable as a tort is that of Lord Scarman in Universe Tankships Inc of Monrovia v International Transport Workers Federation[1983] 1 AC 366 at 400, but that needs to be contrasted with Lord Diplock”s explicit denial of that proposition (at 385). 20.10 This point was, as in the ......
  • CONSUMER PROTECTION, STATUTE AND
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    • Singapore Academy of Law Journal No. 2016, December 2016
    • 1 December 2016
    ...Unjust Enrichment (Hart Publishing, 2016) at p 146. See Universe Tankships Inc of Monrovia v International Transport Workers Federation[1983] 1 AC 366 at 384, per Lord Diplock. 121 James Edelman & Elise Bant, Unjust Enrichment (Hart Publishing, 2016) at pp 37 and 45–46. 122 Cap 393, 1999 Re......
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    • Irwin Books The Canadian Class Action Review No. 7-1, October 2011
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    ...Korkontzilas, [1997] 2 SCR 217 at para 45 [Soulos]. Burrows, above note 22 at 463. Birks, above note 22 at 24, 26, 41, 43, 99, and 303. [1983] 1 AC 366 (HL). This is where the members of the trade union refuse to work for ships flying under a “flag of convenience,” or breach contracts of em......
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