Dimskai Shipping Co SA v International Transport Workers Federation (The Evia Luck) [1992]

Dimskai Shipping Co SA v International Transport Workers Federation (The Evia Luck) [1992] 2 AC 152 is an English contract law case that concerned whether economic pressure could be deemed as duress, provided it was illegitimate and a significant cause for the plaintiff to enter into the contract.

The facts of the case involved The Evia Luck, whose owners were informed by the trade union, International Transport Workers Federation (ITF), that their ship would be blacked (ITF's members would be barred from working on it) unless certain conditions, including entering into new employment contracts with the crew and making backdated payments, were met. When the owners delayed in agreeing to these conditions, The Evia Luck was blacked, and the blacking was lifted when the owners acquiesced and entered into the demanded agreements. Subsequently, the owners sought a declaration that the agreements were voidable due to duress and claimed restitution of payments made.

The House of Lords held that the contracts were avoided, and duress was established as the blacking amounted to illegitimate pressure. Lord Goff outlined the criteria for economic duress. He stated that economic pressure could amount to duress as long as it was characterised as illegitimate and constituted a significant cause inducing the plaintiff to enter into the relevant contract. Lord Goff expressed doubts about the helpfulness of framing the discussion in terms of the plaintiff's will being coerced.

Regarding illegitimate pressure, Lord Goff emphasised that it was unnecessary to delve into the broader question of what constitutes illegitimate pressure, as it was accepted that blacking and the threat of blacking constituted illegitimate economic pressure, unless legitimised by statute. He pointed out that just as the common law implies a tort for breach of statutory duty based on the inferred purpose of a statute, it rejects a claim for duress when the pressure is legitimised by statute.

In the current case, it was established that the governing law of the contract was English law. Despite the blacking occurring in Sweden, where it was legal, the House of Lords found that it constituted illegitimate pressure as there was no statutory provision in English law legitimising it.

This case highlighted the court's introduction of a new test of causation and a departure from the test of 'coercion of the will vitiating consent' laid down in Pao v Lau. Lord Goff's skepticism about the juristic basis of duress being vitiated consent was noted, and the difference between the tests was discussed. The focus on the conduct of the party accused of duress in the test of illegitimate pressure was contrasted with the emphasis on the effect of the pressure on the innocent party in Pao v Lau. The case marked a shift in the legal approach to duress, emphasising the illegitimacy of the pressure exerted.
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