Viking Line ABP v International Transport Workers' Federation & Anor

Industrial action by private trade-union organisations may fall within the scope of the freedom of establishment. A measure which hampers or makes establishment in another Member State less attractive is a restriction. Where the measure is directly discriminatory on grounds of nationality, it cannot be justified merely by invoking freedom of association, the right to strike or worker protection. Even on an indirect-discrimination analysis, the restriction must pursue a legitimate public-interest objective and be appropriate and proportionate, having regard to mutual recognition. The court may grant injunctive relief against threatened conduct and need not decline jurisdiction on comity or forum non conveniens grounds where jurisdiction is conferred by the Brussels Regulation.

Viking, a Finnish shipping company, sought declarations and permanent injunctions against the International Transport Workers’ Federation and the Finnish Seamen’s Union. It intended to reflag the Finnish-registered ferry Rosella to Estonia, use an Estonian collective bargaining agreement and reduce manning costs. The unions had previously invoked the ITF’s flags-of-convenience policy, threatened industrial action and secured an agreement preventing reflagging until February 2005.

The issues were whether the English court should decline jurisdiction on comity or analogous grounds, whether Viking had established a sufficient intention to reflag, and whether the anticipated union conduct would infringe the Community rules on freedom of establishment, free movement of workers or freedom to provide services.

1. Jurisdiction and comity. The claim concerned the legality of anticipated acts by private organisations, not the validity of Finnish law or conduct by the Finnish state. Comity therefore did not prevent the court deciding the claim. The jurisdiction conferred by the Brussels Regulation was mandatory and could not be declined because Finland appeared to be a more suitable forum or because Finnish public-policy issues arose.
2. Intention to reflag. Although Viking had not made a final decision and had not selected the precise corporate or crew-management structure, it had a settled intention, subject to protection from the threatened industrial action, to reflag Rosella to Estonia. That intention was sufficient to support quia timet relief. If reflagging proved impossible, the vessel was likely to be sold.
3. Freedom of establishment. Reflagging a vessel used for economic activity constituted an additional act of establishment. Establishment also included setting up or expanding an Estonian subsidiary or branch, irrespective of the parent’s ownership or control. The ITF’s policy and the FSU’s conduct were likely to prevent or render ineffective negotiations with Estonian unions and therefore restricted Viking’s exercise of Article 43 EC.
4. Horizontal effect and discrimination. The free-movement rules applied to obstacles created by organisations exercising legal autonomy, including trade unions. The anticipated conduct was directly discriminatory because it operated by reference to the Finnish ownership and control of the vessel and sought to protect Finnish jobs. Fundamental rights of association, expression and industrial action could not, without more, justify nationality discrimination. Worker protection was a possible public-interest justification only for indirectly discriminatory or indistinctly applicable restrictions.
5. Alternative analysis. If the restrictions were indirect or indistinctly applicable, they were still not objectively justified or proportionate. The evidence showed that Viking would preserve permanent employees’ employment within the group, and the interests of an Estonian crew would be protected by an Estonian collective agreement and an affiliated Estonian union. The principles in Rush Portuguesa and related cases did not justify imposing Finnish terms on a foreign-flagged vessel and crew.
6. Reference and relief. The court declined to refer questions to the ECJ. The case was fact-dependent, existing Community case law could be applied, and a reference would cause delay likely to frustrate the litigation and cause commercial uncertainty. Permanent injunctions and declarations were ordered substantially in the terms sought, subject to Viking’s undertaking concerning existing permanent employees.