Universe Tankships Inc. of Monrovia v International Transport Workers Federation (Marine)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW |
| Judgment Date | 10 July 1980 |
| Judgment citation (vLex) | [1980] EWCA Civ J0710-1 |
| Date | 10 July 1980 |
| Court | Court of Appeal (Civil Division) |
[1980] EWCA Civ J0710-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice Queen's Bench Division Commercial List
Lord Justice Megaw
Lord Justice Brightman
Lord Justice Watkins, V. C.
MR. L. H. HOFFMAN, Q. C. and MR. V. V. VEEDER (instructed by Messrs. Clifford Turner) appeared on behalf of the Appellants.
MR. R. BUCKLEY, Q. C. and MR. J. H. CHADWICK, Q. C. (instructed by Messrs. Holman Fenwick & Willan) appeared on behalf of the Respondents.
The judgment which I am about to deliver is the judgment of the whole court.
The plaintiffs, Universe Tankships Inc. of Monrovia, who are the respondents in this appeal from a judgment of Parker J. delivered on 2nd April 1980 in the Commercial Court, are a company who own, as one of a fleet of 21 vessels, a tankship, "Universe Sentinel". She is of 269,092 tons deadweight. She is registered in Liberia and flies the Liberian flag. Her owners the owners of all the share capital in the plaintiff company - live in the United States of America. The vessel being registered in one country, while the beneficial ownership is in persons in a different country, the first defendants, International Transport Workers' Federation, regard it as being a vessel flying a "flag of convenience".
The defendant Federation, to which we shall refer as "I. T. F..", is a federation of trade unions from a large number of countries throughout the world, all of them concerned with some form of transport. The trade unions in the United Kingdom which are constituent members of I. T. F.. are the Transport and General Workers Union and the National Union of Seamen. I. T. F.. has its headquarters in this country and it is itself a trade union for the purposes of the Trade Unions and Labour Relations Act 1974.
There are a number of "Sections" of I. T. F.. related to different types of transport. Thus, in addition to a "Seafarers' Section", there are, for example, "Railwaymens' Section", "Dockers' Section", "Civil Aviation Section". The membership of all these sections consists of trade unions. But there is also what is called "the Special Seafarers' Section", the membership of which consists of individuals; that is, persons who are employed in seafaring, as members of crews of ships, but who are unable to be members of a national trade union of their own because, for example, there is no trade union available for them to join in the country of which they are nationals.
The second defendant in the action is Mr. Brian Laughton, secretary ofthe Special Seafarers' Section. No question affecting his rights and liabilities now arises in this appeal. Nor are we concerned with any issue affecting 12 rembers of the crew of the Universe Sentinel who, at their own request, were joined as defendants at the outset of the trial. The issue affecting then was resolved in the course of the trial.
The events which have given rise to this litigation occurred in July 1978, when another battle was joined in the campaign which I. T. F.. have been waging to try to induce the owners of vessels which I. T. F.. regard as vessels flying flags of convenience to comply with the wishes of I. T. F.. as regards the crews of their vessels. The policy and objectives of the campaign, and the respective positions taken up by the two sides, are described in Lord Diplock's speech in N. W. L.. Ltd. v. Woods and Nelson (1979) 1 WLR 1294 at page 1297. We shall not lengthen this judgment by attempting to expound those matters afresh.
The Universe Sentinel, which was on a 20 years' time charter to Texaco Panama Inc., arrived at the Texaco Terminal in Milford Haven on 17th July 1978. She had discharged her cargo by the afternoon of 18th July. She was prevented from sailing because she had been "blacked" by, or at any rate with the active collaboration of, I. T. F.. As a result, no tugs were available and, without tugs, the vessel could not sail. It is conceded for the purposes of this action that the non-availability of the tugs was caused by breaches of contract and that those breaches of contract were brought about or induced by I. T. F.., and that, apart from the effect of provisions of the Trade Unions and Labour Relations Act 1974 (we shall refer to it hereafter as the 1974 Act), the I. T. F.. would have been liable to the plaintiffs, the shipowners, in an action in tort for any loss or damage which the plaintiffs suffered as a result of the procurement of the breaches of contract.
The vessel was thus prevented from sailing from 18th July, when she had discharged her cargo, until 29th July. She was then enabled to obtain the services of tugs and to sail, because on 28th July the plaintiffs agreed tocomply, and on that and the following day complied, with all the demands made by I. T. F.. Those demands, to which we shall refer in more detail hereafter, comprised the signing of agreements with I. T. F.., payments to I. T. F.. of $80,000, and the making of agreements with members of the crew of the Universe Sentinel involving higher wages and other benefits. The plaintiffs accepted those demands because they were suffering severe financial loss, and they believed that they would suffer what might be catastrophic loss, if they did not give in to the whole of I. T. F..'s demands. However, in accepting the I. T. F..'s demands, the plaintiffs, while not disclosing their intention to I. T. F.., had, in fact, after taking legal advice, made up their minds that they would, as soon as the Universe Sentinel had sailed from Milford Haven, do what they could by action in the courts to undo that which they had been forced to do as a result of the pressure which had been applied to then by I. T. F.. On 10th August 1978, through their solicitors, they demanded the return of the $80,000 and notified I. T. F.. that they regarded the agreements as void, because of duress. This was followed by the issue of the writ in the action on 18th August. By arrangements made thereafter, I. T. F.. placed the $80,000 in a joint account to await the result of the action.
We return to describe what were I. T. F..'s demands, with which the plaintiffs complied in order to secure the release of the vessel. These are set out in a document (page 307) prepared for use by I. T. F.. headed: "Conditions to be fulfilled before flag-of-convenience vessels can be issued with I. T. F.. blue certificates". A blue certificate held in respect of a vessel entitled the vessel to exemption from "blacking" by I. T. F.. or its member unions in ports throughout the world. we shall call this document "the blue certificate conditions". It is conceded that the plaintiffs were aware of the contents of that document during their discussions with I. T. F.. in July 1978. Paragraph 1(a) reads:
"The owners of the vessel must sign a Special Agreement with the (I. T. F..). undertaking to apply all sections of the I. T. F.. Collective Agreement to all seafarers on board the vessel".
The paragraph goes on to say that the Collective Agreement provides "a minimum wage scale, based on the European average standard" and that it "also covers other conditions of service and social benefits, i. e. 40 hour week, overtime, sick pay and medical treatment … etc."
Paragraph 2 includes provision that "any seafarers not eligible for membership of an I. T. F.. affiliate must be enrolled in the I. T. F.. Special Seafarers' Section. The enrolment fee is U. S.$.15 per man and the annual contribution U. S.$.30 per man per year".
Paragraph 3 reads as follows:
"The Special Agreement also covers the owners' contributions to the Seafarers' International Welfare Protection and Assistance Fund. The contributions are U. S.$.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 I. T. F.. affiliated unions".
We shall refer hereafter to the Fund described in that paragraph as "the Welfare Fund".
The Special Agreement (page 172) referred to in paragraphs 1 and 3 was signed by the plaintiffs on 28th July. It is expressed to relate to the Universe Sentinel.
Article 1, so far as relevant, reads:
"The company undertake as follows: (a) to employ each Seafarer in accordance with the terms of the current I. T. F.. Collective Agreement for world vide trading … (b) to incorporate the terms and conditions of the I. T. F.. Collective Agreement into the individual contract of employment of each seafarer and into the Ships' Articles … (c) to pay on behalf of each Seafarer contributions and fees at the rates shown in Schedule 2 hereto to the (Welfare Fund) and to the Special Seafarers' Section of the I. T. F.. The contributions and fees shall be paid to the I. T. F.. annually and in advance …"
Schedule 2 (page 173) under the heading "I. T. F.. Special Seafarers' Section", includes a line reading:
"Entrance fees 40 at U. S.$.15 per man U. S.$. - "; and a second line reading:
"Membership fees 40 at U. S.$.30 per man U. S.$. - ".
Beneath this line there is another heading, "Seafarers' International WelfareProtection and Assistance Fund", and opposite that beading is:
"40 at U. S.$. 162 per person per year U. S.$. - ".
The figure of 40 is the number of officers and crew in the Universe Sentinel.
Though the totals of the separate items are not inserted, the grand total of the three items is inserted, correctly calculated as $8,280. In order to understand how one of the amounts in issue in this appeal is made up, it is necessary to see that the total of the amount referable to the Welfare Fund is $6,480:...
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