Whither Economic Duress? Reflections on Two Recent Cases
| Author | Andrew Phang |
| Date | 01 January 1990 |
| DOI | http://doi.org/10.1111/j.1468-2230.1990.tb01796.x |
| Published date | 01 January 1990 |
Jan.
19901
Whither Economic Duress?
Whither Economic Duress? Reflections on
Two
Recent
Cases
Andrew
Phang”
Introduction
From its rather tentative and extremely recent beginnings,
I
the law relating to economic
duress has developed at a relatively rapid pace during the last decade or
so.
We have
had a series of decisions from various courts and jurisdictions* which, collectively at
least, affirm the existence of the doctrine in English law. The pronouncements at the highest
levels, h~wever,~ have not purported to be definitive, and, as we shall see, have certainly
not aided in a clarification and systematization of the doctrine
of
economic dure~s.~ The
two recent decisions, which
are
the subject of the present comment, have merely underscored
the
very
urgent need for a bolder and more definitive approach toward this dynamic area
of the common law Since the factual nature of the doctrine is of special importance, it
is appropriate
to
begin with the essential facts of each case.
The first,
Vantage Navigation Corporation
v
Suhail
and
Sad
Bahwan Building Materials
LLC,
(The ‘Alev’),5
a decision by Hobhouse,
J.,
concerned plaintiff shipowners who had
brought an action against the defendant endorsees of the bill of lading under the following
circumstances. The plaintiffs had time chartered their vessel to third parties who, as it
turned out, were financially unsound, ultimately declaring themselves bankrupt; only part
of the hire had in fact been paid. The plaintiffs then attempted to recoup their losses by
renegotiating with the various bill of lading holders, of which the defendants, of course,
were one. The plaintiffs adopted this course of action even though they were nevertheless
legally bound to carry the cargo to destination as freight had been prepaid with regard
to the bills of lading. The plaintiffs’ basic approach was to ‘seek’ financial assistance,
failing which they intimated that the voyage to the various destinations could not be
completed. It is of significance to note that, although the other bill of lading holders paid
the plaintiffs various sums of money, the defendants initially stood their ground6
-
all
this despite the fact (and an important one at that) that the delay in delivering the cargo
was ‘seriously dislocating’ the defendants’ business.’ The plaintiffs, however, persisted
in their stand, clearly threatening the defendants (as Hobhouse
J.
equally clearly found),8
*Senior Lecturer, Faculty of
Law,
National University of Singapore.
See, especially,
Occidental Worldwide Investment Corp.
v
Skibs A/S Avanti, Skibs A/S Glarona, Skibs
A/S
Navalis, (The ‘Siboen’ and the ‘Siborre’)
[1976]
1
Lloyd’s Rep. 292. Academic opinion (and
exhortations for development) came (as usual) much earlier: see,
e.g.,
W.R. Cornish, (1966) 29 M.L.R.
428; and Beatson, [1974] C.L.J. 97.
The leading ones of which include
The ‘Siboen’ and the ‘Siborre’, supra,
note
1;
Alexander Barron
v
Alexander Ewan Armstrong,
[1976] A.C.
104,
P.C.;
North Ocean Shipping
Co
Lrd
v
Hyundai Construction
CoLrd, The Atlantic Baron,
[1979]
Q.B.
705;
Pa0
On
v
Lau
Yin
Long,
[1980] A.C.
614,
P.C.;
Universe
Tankships Inc
of
Monrovia
v
International Transport Workers’ Federation,
[I9831
1
A.C. 366, H.L.;
and
B.
&
S.
Contracts and Design Lrd.
v
Victor Green Publications ad.,
[I9841 I.C.R. 419, C.A.
i.e.,
from the House
of
Lords (see the
Universe Tankships
case,
supra,
note 2) and the Judicial Committee
of the Privy Council (see
Barton
v
Armstrong, supra,
note 2; and
Pa0
On
v
Lau
Yiu
Long,
supra,
note 2).
See also Carty and Evans [1983] J.B.L. 218.
[1989]
1
Lloyd’s Rep. 138.
See [1989]
1
Lloyd’s Rep. 138,
141.
Ibid.
An important part of the defendants’ business included the supply
of
steel to building and civil
engineering contractors. The cargo involved in the instant case comprised some 14,500 tonnes of high
tensile and mild steel bars.
[1989]
1
Lloyd’s Rep. 138, 142.
107
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