Adam Opel GmbH & Anor v Mitras Automotive (UK) Ltd

Economic duress requires pressure which practically compels the claimant or leaves no practical choice, illegitimate pressure, and significant causation. The relevant factors are not exhaustive, and whether pressure exceeds robust commercial bargaining involves a fact-sensitive value judgment. A threat to breach a supply contract may constitute illegitimate pressure where the threatened breach creates an acute commercial emergency and the victim has no adequate alternative. A contractual variation induced by such pressure is voidable and may be avoided. The law of consideration does not generally protect a party from an unfair variation where Williams v Roffey applies; economic duress provides the principal control.

Opel and Renault operated a joint venture vehicle programme for which Mitras was the sole UK supplier of a bumper-mount component. When the claimants decided to change the manufacturing technology and replace Mitras, Mitras threatened to stop supplies unless substantial compensation and increased prices were accepted.

The claimants capitulated, paid £451,021.80, and later sought repayment, alleging economic duress and absence of consideration. Mitras counterclaimed compensation under a termination clause. The central issues were whether the agreement was voidable for economic duress, whether it failed for want of consideration, and what compensation was recoverable on termination.

1. Economic duress. The court adopted the established requirements of pressure causing compulsion or lack of practical choice, illegitimacy, and significant causation. The factors relevant to illegitimacy are non-exhaustive. Their weight depends on the facts, and the distinction between illegitimate pressure and robust commercial bargaining involves an evaluative judgment.
2. Mitras’ communications, followed by the refusal to permit collection of the components, amounted to a threat to stop contractual supplies unless its demands were met. The claimants faced an imminent production stoppage, lacked a realistic alternative source, and could not safely rely on an interim mandatory injunction. The pressure caused the agreement and payments, and was illegitimate because Mitras had no right to demand early payment, the additional lump sums or the backdated price increase, or to withhold performance.
3. The agreement was therefore voidable and had been avoided. The claimants were entitled to recover the £451,021.80 paid under it.
4. Consideration. The court was bound by Williams v Roffey Bros. & Nicholls (Contractors) Ltd. to accept that a promise to perform an existing contractual obligation could constitute consideration where the promisee obtained a practical benefit, subject to economic duress. Consideration could not therefore provide an additional or alternative basis for relief.
5. Counterclaim. Applying the termination clause, development work reasonably undertaken for production was compensable. Mitras failed, however, to prove the claimed unrecovered development costs beyond the £19,118 conceded. Its claims for capacity investment and removal costs were unsupported by sufficient detail or evidence and were disallowed.

Judgment was entered for the claimants for £451,021.80. The counterclaim was dismissed except for £19,118.