Universe Tankships Inc of Monrovia v International Transport Workers Federation (The Universe Sentinel)
Money paid under economic duress, caused by illegitimate pressure that is a significant cause of the payment, can be recovered.
Facts
The Universe Sentinel, a ship flying a Liberian flag of convenience, arrived at Milford Haven. The International Transport Workers Federation, a trade union opposing flags of convenience, blacked the ship, persuading tug crews not to help it leave port. The union refused to lift the blacking unless the owners agreed to pay their crew at union rates and made a substantial payment into the union's welfare fund. The owners paid to get the ship released and then sued to recover the welfare fund payment.
Legal principle
The House of Lords held, by a majority, that the owners could recover the payment to the welfare fund. Economic duress makes a contract voidable and allows money paid under it to be recovered. Lord Diplock said that the pressure must be illegitimate and must have been a significant cause inducing the victim to enter into the contract. The blacking was not protected by the trade disputes legislation, because the payment to the welfare fund was not connected with terms and conditions of employment, so the pressure was illegitimate.
Related cases on duress and undue influence
- Allcard v Skinner (1887) 36 Ch D 145
- Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833
- Barclays Bank plc v O'Brien [1994] 1 AC 180
- Barton v Armstrong [1976] AC 104
- CIBC Mortgages plc v Pitt [1994] 1 AC 200
- Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144
- CTN Cash and Carry Ltd v Gallaher Ltd [1994] 4 All ER 714
- Lloyds Bank Ltd v Bundy [1975] QB 326
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