International Transport Workers' Federation & Anor v Viking Line ABP & Anor

Interim relief in a dispute involving unresolved EU-law questions is governed by the ordinary serious-case, adequacy-of-damages and balance-of-convenience framework. Where damages are inadequate for both sides, the claimant’s case is a material factor, but no rigid rule requires a strong prima facie case. The court should exercise caution where conduct lawful under national law is said to become unlawful solely through the effect of EU free-movement provisions. An injunction which would substantially deliver the final remedy should not ordinarily be granted before the European Court has ruled. Here, the substantive questions concerning collective action, freedom of establishment and services, direct effect, justification and proportionality were referred, the lower court’s injunctions were set aside, and interim measures were refused.

Viking, a Finnish ferry operator, sought to reflag the Rosella from Finland to Estonia to reduce labour costs. The Finnish Seamen’s Union opposed the move and, with the International Transport Workers’ Federation, threatened or organised industrial action intended to preserve Finnish negotiating rights and employment conditions.

Mrs Justice Gloster, sitting in the Commercial Court, granted permanent injunctions restraining the threatened action. She held that it restricted Viking’s freedom of establishment under Article 43 of the EC Treaty, alternatively its freedom to provide services and the free movement of workers. The central questions on appeal were whether the free-movement provisions applied horizontally to union action and, if so, whether the restrictions were discriminatory, justified and proportionate. The Court of Appeal also considered interim measures pending a reference to the European Court.

1. Disposition. The appeal was allowed. Gloster J’s decision was set aside, the proceedings were stayed and questions were referred to the European Court of Justice. Interim measures in Viking’s favour were refused. Lord Justice Mummery and Lord Justice Tuckey agreed with Waller LJ.
2. Interim relief. Applying the guidance associated with American Cynamid Co v Ethicon Ltd [1975] AC 396 and R v Secretary of State for Transport ex parte Factortame Ltd and Others [1991] 1 AC 603, the court first asks whether there is a serious case to be tried, then considers the adequacy of damages for the claimant and defendant. If damages are inadequate for either side, the court must consider the balance of convenience and all the circumstances.
3. There is no rigid requirement for a strong prima facie case, even in a case resembling Factortame. The strength of the claimant’s case is nevertheless material when balancing the competing risks. Caution is required where conduct lawful under national law is said to be rendered unlawful solely by the effect of Treaty provisions.
4. Damages were not an adequate remedy for either side. Replacing the existing crew could make restoration difficult or impossible, while losses relating to jobs and employment opportunities would be difficult to calculate or enforce. The court accepted the unions’ reliance on the reasoning in Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130.
5. The requested injunction would come close to granting Viking the final remedy before the unresolved European-law issues had been determined. The balance of convenience therefore favoured refusing interim relief. The court left unresolved whether Articles 43 and 49 of the EC Treaty or Regulation 4055/86 applied to private collective action, whether they had horizontal direct effect, and whether the threatened action was discriminatory, justified or proportionate. Those questions were referred for a preliminary ruling.

• Court of Appeal (Civil Division): In [2005] EWCA Civ 1299, the court set aside the injunctions, stayed the proceedings, referred questions to the European Court of Justice and refused interim measures.
• Queens Bench Division, Commercial Court: Mrs Justice Gloster, in proceedings numbered 2004 Folio 684, handed down judgment on 16 June 2005 and granted permanent injunctions restraining the threatened industrial action.