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Cite as: [1985] ECC 49, [1984] 3 WLR 413, [1984] UKHL 7, [1985] AC 58, [1984] 3 All ER 39

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HOUSE OF LORDS

Date: 19 July 1984

	BRITISH AIRWAYS BOARD (A BODY CORPORATE)	(RESPONDENTS)
	v.
	LAKER AIRWAYS LIMITED AND OTHERS	(APPELLANTS)

	BRITISH CALEDONIAN AIRWAYS LIMITED	(RESPONDENTS)
	v.
	LAKER AIRWAYS LIMITED AND OTHERS	(APPELLANTS)

	LAKER AIRWAYS LIMITED AND ANOTHER	(APPELLANTS)
	v.
	SECRETARY OF STATE FOR TRADE AND INDUSTRY	(RESPONDENT)

	(CONJOINED APPEALS)

LORD DIPLOCK

My Lords,

Of these conjoined appeals, two are brought in civil actions in which the British Airways Board (B.A.) and British Caledonian Airways Ltd. (B.C.) respectively, are plaintiffs. With these I propose to deal first; the third appeal is brought in an application for judicial review. All three appeals form part of the aftermath of the relatively brief incursion into the ranks of airlines operating scheduled services between the United Kingdom and the United States of America, that was made by Sir Freddie Laker operating through a company, Laker Airways Ltd., incorporated in Jersey but with its principal office in London and transacting business there and elsewhere in the United Kingdom and in the United States. To this company, and the other companies through which Sir Freddie operated scheduled air services across the North Atlantic and the liquidators of those companies, I shall refer, collectively and individually, as "Laker."

The civil actions in the High Court

Laker's attempts to break into the market for the provision of scheduled air services between places in the United Kingdom and places in the United States of America (which, under the Chicago Convention of 1944, required the consent of the governments of both countries) achieved success in 1977 when it became an airline designated by the United Kingdom to operate a scheduled service on the New York-London route. This was done under the bi-partite treaty between the United Kingdom and the United States known as "Bermuda 2," which entitled each country to designate two of its airlines to operate on that route. The other designated British airline was B.A. Its status as sole designated British airline for the New York-London route was of long standing. Progressively, at intervals between 1977 and its subsequent financial collapse in February 1982, Laker also became a designated British airline for the New York-Manchester, Los Angeles-London, Los Angeles-Manchester, Los Angeles-Prestwick, Miami-London, Miami-Manchester, Miami-Prestwick and Tampa-London routes.

The other airlines operating scheduled services (as distinct from charter flights) across the North Atlantic between the United States and the United Kingdom and other destinations in Western Europe, including B.A. and B.C., were members of the International Air Transport Association ("I.A.T.A."). Between airlines that are members of I.A.T.A. ("I.A.T.A. Airlines") there exist elaborate arrangements for co-operation, involving through-bookings for carriage by different airlines, interchangeability of tickets, coordination of time tables, uniform fares for various classes of travel providing differing standards of amenity and the like, with which air travellers are familiar. They are made possible by I.A.T.A.'s operating a clearing house for the adjustment of accounts between member airlines resulting from the carrying out of such collaborative agreements.

Laker, upon becoming a designated British airline for the New York-London route did not become a member of I.A.T.A. It did not conform to the I.A.T.A. fare structure or participate in any of its arrangements for collaboration between I.A.T.A. airlines. Instead, it challenged the whole I.A.T.A. system by instituting a low-cost, no frills "skytrain" service in each direction at one-way fares which covered carriage only and, at the beginning, were little more than one-third of the price of the one-way fare then being charged for travel by I.A.T.A. airlines in the class that offered the lowest standard of amenities. This policy, which I will refer to for convenience as "the Skytrain policy," was extended by Laker to each of the new routes between the United Kingdom and the United States for which Laker progressively became a designated British airline. It was so successful in attracting passengers that by the time of its collapse, in February 1982, Laker was carrying one-seventh of all passengers by air across the Atlantic between the United Kingdom and the United States.

It may well be that the low fares charged under the Skytrain policy created a demand for air passages from persons who would not otherwise have contemplated transatlantic travel at all; but it appeared to the I.A.T.A. airlines operating transatlantic routes that fares so much less than the uniform standard fares charged by them under current I.A.T.A. agreements were calculated to attract, and to divert to Laker, passengers who would otherwise have travelled by I.A.T.A. airlines not only to destinations in the United Kingdom itself but to ultimate destinations in other Western European countries to which easy and frequent on-carriage was available to and from London. One of the most important factors in the profitability of operating a passenger airline is the payload, viz. the proportion of the total available seats which on an average it is able to fill. To meet what they regarded as the threat to the maintenance of payloads to which they were exposed by the lower fares charged by Laker under the Skytrain policy, the I.A.T.A. airlines introduced fares substantially lower than their uniform standard fares for the lowest class of travel, and approximately matching those charged by Laker. These new cheap fares were available on "stand-by" terms, depending on the availability of a seat, or were subject to compliance with requirements as to advanced booking; but, it is alleged by Laker, they were inclusive of "in-flight" amenities, for which extra charges were made under Laker's Skytrain policy, and entitled the passenger to other advantages resulting from the availability of collaborative arrangements with other I.A.T.A. airlines in consequence of their being parties to the various I.A.T.A. agreements.

By the beginning of 1982, Laker's finances had become overstretched, and disaster struck. The causes for this are not, in my view, a matter for your Lordships. Attempts at a rescue operation for re-financing Laker were made, but to no avail. The causes for their failure are also not a matter for your Lordships. On 5 February 1982 Laker ceased trading and on 17 February it went into liquidation in Jersey.

The American legal proceedings by Laker

My Lords, this brief account of the rise and fall of Laker is sufficient to explain the nature of the American litigation started by Laker (acting by its liquidator) in the Federal District Court of the District of Colombia ("the American action"). The object of the English civil actions in the High Court in which the appeal to your Lordships' House from the judgment of the Court of Appeal, reversing that of Parker J., is brought is to prevent Laker from continuing with the American action. The American action was started by a complaint, dated 2k November 1982, against a number of I.A.T.A. airlines: two of them, T.W.A. and Pan-Am, being U.S. airlines; two of them, B.A. and B.C., being British and the respective plaintiffs in the two English civil actions. Other airline defendants in the American action were airlines of other western European countries which operated North Atlantic routes; and there were two non-airline defendants, McDonnell Douglas Corporation ("McD.D."), the aircraft manufacturers, and an associated company of McD.D. concerned with providing finance for the purchase of aircraft from McD.D.

The complaint is reproduced in full as an appendix to the judgment of the Court of Appeal in the instant case [1984] Q.B. 142, 203-9. In order to dispose of the instant appeal, however, it is, I think, sufficient to point out that it alleges two causes of action ("counts"). The first is brought under section 4 of a United States Act of Congress, the Clayton Act, and claims threefold damages for injury caused to Laker by unlawful combination and conspiracy between the defendants in restraint of and to monopolise trade or commerce contrary to sections 1 and 2 of the U.S. Act of Congress, the Sherman Act; the second count, based on the same facts, is described as "intentional tort." The claim under the antitrust count is quantified at $1,050m., being three times the compensatory damage alleged to amount to $350m.; the claim for intentional tort count is for the same total figure arrived at by adding to the compensatory damage punitive damage amounting to $700m.

My Lords, one of the characteristics of the rules of civil procedure in the federal courts of the United States (as well as in most state courts), which seems to any English lawyer strange and, indeed, oppressive upon defendants, is that a "complaint," the document by which an action is begun, while it alleges that the complainant has a cause of action against the defendant or defendants, does not disclose, or discloses only in a most exiguous form, the facts which the plaintiff will eventually rely upon at the trial as giving rise to that cause of action. Instead, the complaint is accompanied, or immediately followed, by a request to the defendants for pre-trial discovery which bears little resemblance to the kind of discovery that is available in English civil actions. Its breadth, the variety of methods, oral and written, that it makes available for a wide-roving search for any information that might be helpful to the case of the party seeking discovery, the enormous expense, irrecoverable in any award of costs to a successful defendant, in which it may involve parties from whom discovery is sought, and its potentiality for oppressive use by plaintiffs, particularly in antitrust actions, receive sufficient mention in the various speeches in this House in In re Westinghouse Electric Corporation Uranium Contract Litigation M.D.L. Docket No. 235 (Nos. 1 and 2) [1978] A.C. 547. What for present purposes is important particularly as respects the civil action by B.C. is that if the American action ever reaches the stage of trial, what evidence in support of its complaint Laker will by that time have unearthed by the process of pre-trial discovery it is as yet impossible to foretell; but, again, for the purpose of disposing of the instant appeal it is, I think, enough to say that the aim of the antitrust combination and conspiracy (and intentional tort) alleged in the complaint was to drive Laker out of the scheduled airline business as a competitor of the I.A.T.A. airline defendants; and that the principal means by which this was to be accomplished were first to attract potential passengers away from Laker's airline by offering to carry them at what in antitrust jargon are described as "predatory fares," i.e. loss-making fares which while they matched Laker's fares (which in conformity with its Skytrain policy covered carriage alone) included, as well as actual carriage but free of any extra charge, those in-flight services and other advantages available to passengers by I.A.T.A. airlines to which reference has been made above and to provide which involved those airlines in substantial expense which could not be met out of the fares they charged. The second means, to which B.C., Lufthansa and Swissair, among the I.A.T.A. airlines, and McD.D. are alleged to have played an active part after Laker had been reduced to the financial straits in which it found itself at the beginning of 1982 in consequence of the above-mentioned predatory fares, was to put pressure upon potential participants in the financial rescue scheme for Laker at the beginning of 1982 to withdraw their support and so to prevent Laker's survival as a competitor of the I.A.T.A. airline defendants in the provision of scheduled services across the North Atlantic.

My Lords, there are two propositions, one of American law and thus of fact, the other of English law, which, if correct, are in my view decisive of the appeals in both the civil actions without its being necessary for your Lordships to make detailed reference to the multitudinous documents which this litigation has already generated.

Upon the first proposition, that of American law, not only is the expert evidence all one way but it is also common ground between the parties, that if the allegations made against B.A. and B.C. in the complaint in the American action can be proved at the trial they disclose a cause of action by Laker against B.A. and B.C. under the antitrust law of the United States (viz. the Sherman Act and the Clayton Act) which falls within the jurisdiction of the Federal District Court for the District of Colombia within whose territorial area both B.A. and B.C. have premises at which they carry on business. Indeed, Judge Greene, the judge of the District Court who has been in charge of the pre-trial proceedings in the American action, regards the complaint as being of a kind so commonplace that he describes it as an antitrust action of "the garden variety," a description which embraces the alternative way of pleading the antitrust cause of action as a count for "intentional tort."

The second proposition, that of English law, was understood by your Lordships to have been common ground between the parties, at any rate throughout the lengthy hearing of the appeal; no argument casting any doubt upon it was advanced. The proposition is that, even if the allegations against B.A. and B.C. in the complaint in the American action can be proved, they disclose no cause of action on the part of Laker against B.A. or B.C. that is justiciable in an English court. The Clayton Act which creates the civil remedy with threefold damages for criminal offences under the Sherman Act is, under English rules of conflict of laws, purely territorial in its application, while because the predominant purpose of acts of B.A. and B.C. that are complained of was the defence of their own business interests as providers of scheduled airline services on routes on which Laker was seeking to attract customers from them by operating its Skytrain policy, any English cause of action for conspiracy would be ruled out under the now well-established principle of English (as well as Scots) law laid down in a series of cases in this House spanning 50 years of which it suffices to refer only to Mogul Steamship Co. Ltd. v. McGregor, Gow & Co. [1892] AC 25 and Crofter Hand Woven Harris Tweed Co. Ltd. v. Veitch [1942] AC 435.

In the result your Lordships are confronted in the civil actions with a case in which there is a single forum only that is of competent jurisdiction to determine the merits of the claim; and that single forum is a foreign court. For an English court to enjoin the claimant from having access to that foreign court is, in effect, to take upon itself a one-sided jurisdiction to determine the claim upon the merits against the claimant but also to prevent its being decided upon the merits in his favour. This poses a novel problem, different in kind from that involved where there are alternative for a in which a particular civil claim can be pursued: an English court and a court of some foreign country both of which are recognised under English rules of conflict of laws as having jurisdiction to entertain proceedings against a defendant for a remedy for acts or omissions which constitute an actionable wrong under the substantive law of both England and that foreign country.

Cases which have these characteristics can now conveniently be labelled as forum conveniens cases. In them the High Court has jurisdiction to control how the choice of forum shall be exercised. It does so by the use, as circumstances may require, either of its discretionary power to grant or refuse a stay of the action in the English court by the party who is a plaintiff there, or of its discretionary power to enjoin a party who is, or is threatening to become, a plaintiff in the foreign court from continuing or commencing proceedings in that court. Leaving aside claims that can immediately be identified as frivolous and vexatious, the High Court, at the stage at which it exercises this jurisdiction, is making no determination on the merits of the claim; it is deciding by which court, English or foreign, the merits of the claim ought to be tried. The principles to be applied by the High Court in making this decision in forum conveniens cases have been developed over the last 10 years in a number of decisions of this House starting with The Atlantic Star [1974] A.C. 436, continuing with MacShannon v. Rockware Glass Ltd. [1978] A.C. 795 and Castanho v. Brown & Root (U.K.) Ltd. L1981] A.C. 557, and ending with The Abidin Daver [1984] 2 W.L.R. 196; but the principles expounded in the speeches that were delivered in all these cases start from the premiss that the claim by one party against an adverse party is a claim to a right that is justiciable in England. Except for a short passage in the opinion of my noble and learned friend, Lord Scarman, in Castanho (with which all four other members of the Appellate Committee, including myself, agreed), I do not find the speeches in the forum conveniens cases of assistance in solving the novel problem with which your Lordships have to face in the civil actions that are subjects of the instant appeals.

The answer to these appeals, in my opinion, clearly emerges from the application to the allegations that are crucial in Laker's case against B.A. and B.C. in the American action of what since the merger of the courts of common law and chancery has been a fundamental principle of English legal procedure. That principle, originally laid down in North London Railway Co. v. Great Northern Railway Co. (1883) 11 QBD 30, was re-stated by me (albeit in terms that I recognise were in one respect too narrow) in Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210, 256, as follows:

"A right to obtain an . . . injunction is not a cause of action .... It is dependent upon there being a preexisting cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court."

This, being said in the context of an application for a Mareva injunction, omitted to mention the type of case that is of comparatively rare occurrence in the English courts in which the plaintiff seeks against a person amenable to the jurisdiction of the English High Court an injunction to restrain the defendant from bringing suit against him in a foreign court upon the ground that the plaintiff is entitled under English law to a legal or equitable right not to be sued in that foreign court by that person upon the cause of action that is the subject of such proceedings. A right not to be sued upon a particular cause of action in a particular foreign court by the person against whom the injunction is sought may be contractual in origin. A common example of this is an exclusive jurisdiction clause in a contract. Furthermore, if under English law a defence would be available to the injunction-seeker, that defence may be given anticipatory effect as a right not to be sued that is enforceable by injunction in an action for a declaration of non-liability. Of such defences it is not difficult to point to a number of examples most of them equitable in historical origin, such as estoppel in pais (which was also a defence at common law), promissory estoppel, election, waiver, standing by, laches, blowing hot and cold - to all of which the generic description of conduct that is "unconscionable" in the eye of English law may be given. I would accordingly agree, as I did in Castanho, with the qualification to the statement of principle in the stark terms in which I expressed it in The Siskina, at p. 210, 256, that was added by Lord Scarman in Castanho, at p. 573:

"But the width and flexibility of equity are not to be undermined by categorisation. Caution in the exercise of the jurisdiction is certainly needed: but the way in which the judges have expressed themselves from 1821 onwards amply supports the view for which the defendants contend that the injunction can be granted against a party properly before the court, where it is appropriate to avoid injustice."

The grounds on which it was claimed by B.A. and B.C. that it amounted to unconscionable conduct on the part of Laker to sue them in the American action for charging predatory fares, or, more accurately, for entering into a combination or conspiracy with other airlines that was unlawful under U.S. antitrust laws to charge fares to which the description "predatory" was applicable, appear to have undergone considerable modification in the course of the passage of the civil actions through three courts. In the final analysis, by the time the matter reached your Lordships' House the ground relied on can, I think, be stated thus: (1) The only fares that British airlines operating transatlantic routes between the United Kingdom and the United States were authorised to charge to passengers on such routes were restricted to those fares that were specified in the terms of a current air transport licence, granted to that British airline by the Civil Aviation Authority (C.A.A.) under sections 21 to 24 of the Civil Aviation Act 1971, and regulations made thereunder, on which that airline's right lawfully to operate on that particular route depended. (2) In order to entitle the British airlines to operate on that particular route within the territorial airspace of the United States, those fares had likewise to be authorised by a permit granted to the airline by the U.S. Civil Aeronautics Board (C.A.B.) under the Federal Aviation Act 1958 of the United States. (3) Laker by applying successfully to the C.A.A. for an air transport licence to operate a scheduled service alongside that of B.A. on the New York-London route as a British airline designated by the United Kingdom under Bermuda 2, and when it subsequently applied for air transport licences to operate scheduled services as a designated British airline on other transatlantic routes, took advantage of this system in order to obtain the right to operate such scheduled services. (4) Thereby it submitted the regulation of the fares that it was authorised currently to charge on its Skytrain services, to the same statutory regime as that to which the fares authorised to be charged by B.A. and B.C. were subject, viz. approval by the C.A.A. under a procedure which made provision whereby any British airline which felt itself aggrieved by any proposal to the C.A.A. for any changes in fares authorised to be charged on a particular route by some other airline which it regarded as a competitor in the passenger market in which the aggrieved airline's scheduled service operated could submit its objections to such proposal for consideration by the C.A.A. (5) It would be unconscionable conduct on the part of Laker to sue B.A. or B.C. for doing something that was permitted by the regime for regulation of fares to which Laker had of its own volition become a party.

This ground is capable of being summarised in one sentence: Laker having had the benefit of being admitted to the scheduled airlines' club could not in good conscience complain of conduct by fellow members that was permitted by the club's rules.

My Lords, I do not find it necessary to consider whether an argument on these lines could be advanced with any degree of plausibility if the grant to a British airline by C.A.A. of an air transport licence to operate a scheduled passenger service on a route between the United Kingdom and the United States at fares specified in such licence, coupled with "designation" for that route by the United Kingdom Government to the United States Government under the Bermuda 2 treaty, was all that was required to make lawful under the law of the United States all flights within the territorial airspace of that country that were in conformity with the terms of the air transport licence. Such is, however, very far from being the case.

Everything that a British airline does in the United States or in its territorial airspace is subject to the domestic law of the United States both criminal and civil. Section 21(1) and (2) of the Civil Aviation Act 1971 make it unlawful under English law for a British aircraft (i.e. one registered in the United Kingdom) to be used for the carriage of passengers for reward anywhere in the world except in accordance with the terms (including terms as to the fares that are authorised to be charged) of an air transport licence granted to the operator of the aircraft by the C.A.A. The legal effect in English law of an air transport licence so far as flights within the territorial jurisdiction of a foreign state are concerned is limited to imposing upon the operator to whom the licence is granted obligations (enforceable in English courts by criminal sanctions) that may be identical with or additional to those obligations that are imposed upon that operator by the domestic law of the foreign state within whose territorial jurisdiction the flight is being undertaken. An air transport licence granted under the Civil Aviation Act 1971 is incapable in English law of relieving the operator to whom it is granted from any obligation that is imposed upon him by the domestic law of that foreign state; nor does the Act purport to give any such effect to it.

Broadly speaking, the aim of bipartite treaties such as Bermuda 2 which are entered into by the United Kingdom with foreign states is to secure that the obligations imposed by the domestic law of one state upon operators of scheduled services upon routes between the two states that are parties to the treaty shall be the same as, or, at any rate, shall not conflict with, the obligations imposed upon those operators by the domestic law of the other party to the treaty; but whether the treaty has achieved this aim so far as it applies to the operations of designated British airlines within the territorial jurisdiction of the United States is not a question that an English court has jurisdiction to determine, since Bermuda 2 forms no part of English law. What is relevant for present purposes is that the domestic law of the United States includes the U.S. antitrust laws embodied in the Sherman and Clayton Acts as those Acts of Congress have been so expansively interpreted by the U.S. courts, as well as including the Federal Aviation Act 1958 and the Bermuda 2 treaty itself which, in contrast to the position under United Kingdom law, is under the Constitution of the United States of direct application as part of the American domestic law.

As already mentioned, a British airline, as a "foreign airline" within the meaning of the Federal Aviation Act, is required to obtain a permit from the C.A.B. to engage in air transportation in the United States or between the United States and other countries. Fares which a foreign airline proposes to charge for such transportation must be filed with C.A.B. which has power under the Federal Aviation Act to approve or disapprove fares so filed. The disapproval by C.A.B. of a fare so filed is subject to overruling by the President of the United States.

Any agreements between airlines relating inter alia to fares to be charged by them on particular routes, which in relation to routes between the United States and other countries means in effect agreements between I.A.T.A. airlines, are also required to be filed with C.A.B. which is empowered to approve or disapprove them. C.A.B.'s disapproval of the agreement between I.A.T.A. airlines providing for the fares that are to be charged, unlike its disapproval of individual fares specified in such agreement, is not liable to be overruled by the President. Neither approval nor disapproval by C.A.B. is, of itself, decisive either way as to the lawfulness or unlawfulness of the agreement under the U.S. antitrust laws; but C.A.B. may upon approving an agreement of this kind make an exclusion order exempting the agreement and acts done in performance of it from the antitrust laws.

In the instant case the agreement between I.A.T.A. airlines as to the fares that they would charge on transatlantic routes upon which agreement Laker relies in the American action as constituting a combination and conspiracy made unlawful by the Sherman Act and so giving to Laker a cause of action for three times the damages caused to it by the carrying out of the agreement was filed with C.A.B. but did not receive its approval. So no question of its being exempted under the Federal Aviation Act from American antitrust laws can arise. Certain fares for which the agreement provided, in particular "stand-by" fares, were approved by C.A.B.; others were disapproved initially but the board's disapproval was overridden by the President of the United States; Laker's cause of action in the American action, however, is not based upon the actual charging by individual airlines such as B.A. of fares that were so approved, but upon the antecedent agreement to charge those fares entered into between those I.A.T.A. airlines alleged to be parties to it, which agreement Laker claims is a combination and conspiracy prohibited under American antitrust laws.

My Lords, by obtaining an air transport licence from C.A.A. to operate scheduled services on routes between the United Kingdom and the United States as British airlines designated by the United Kingdom government under Bermuda 2, B.A., B.C. and Laker alike voluntarily submitted themselves to a regulatory regime which, so far as their operations within the territorial jurisdiction of the United States were concerned, required that each of them should become subject to American domestic law including American antitrust laws. In the circumstances as I have outlined them, it seems to me to be impossible to argue plausibly either that Laker by submitting itself to such a regime precluded itself from relying upon any cause of action against B.A. or B.C. that might accrue to it under American antitrust laws as a result of what these airlines subsequently did within the territorial jurisdiction of the United States; or that there was anything so unconscionable or unjust in Laker's conduct in pursuing such cause of action in a U.S. court that an English judge, in the proper exercise of a judicial discretion, would be entitled to grant an injunction to prevent Laker from doing so. The argument founded upon "admission to the scheduled airlines club" which, for the reasons I have given, must be rejected as fallacious does not appear to have been advanced at the hearing of the civil actions at first instance by Parker J. The argument at that stage appears to have been largely focused upon the public policy of the United Kingdom in relation to the enforcement of American antitrust laws against United Kingdom nationals, as the principal ground on which Laker should be restrained from proceeding with the American action against the two British defendants B.A. and B.C. Before it turns to public policy, however, Parker J.'s judgment contains an admirable summary of the general principles upon which the discretion to restrain a party from suing in a foreign court ought to be exercised. My only, and minor, criticism of this summary is that it does not lay sufficient stress upon the crucial distinction to which I have drawn attention between what the English court is doing when it grants an injunction in a forum conveniens case and what it is doing when it grants an injunction in a single forum case. Even as he stated them, however, those principles led him to the conclusion that his discretion should be exercised in favour of the refusing of the permanent injunctions sought by B.A. and B.C., but he granted temporary injunctions pending appeal to the Court of Appeal.

Parker J., and subsequently the Court of Appeal and this House, had the advantage of statements by counsel instructed by the Attorney-General as to the attitude of Her Majesty's Government, i.e. the executive, towards Laker's American action. For my part, I regard this as a dubious advantage, for the litigation between Laker, B.A. and B.C. both in the United States and in England falls within the field of private law, where the sources of the public policy to which courts of justice give effect in litigation between subject and subject are to be found in judicial decisions and in legislation and not in the views of the executive government except in the relatively narrow field of international relations between sovereign states which is still reserved to the prerogative.

The public policy relevant to Laker's American action of which it is legitimate for an English court to take account includes the Protection of Trading Interests Act 1980. It was the subject of close analysis by Parker J. who held that it did not assist B.A. or B.C. in their claims to injunctions. I agree with his analysis and his conclusions; but it is more convenient to defer consideration of that Act until I come to deal with the application for judicial review of the orders made and directions given under it by the Secretary of State in the interval between the decision of Parker 3. at first instance and the hearing of the appeal in the Court of Appeal.

The statement of the attitude taken by the executive government towards the American action by Laker was that in failing to see to it that steps were taken (presumably by C.A.B. under the Federal Aviation Act) in relation to B.A. and B.C.'s operations in the United States that would make those British airlines immune from suit under the Clayton Act and from prosecution under the Sherman Act (which is concurrently the subject of investigation by a grand jury) the U.S. Government was in breach of its treaty obligations under Bermuda 2. This is disputed by the U.S. Government; and that treaty itself contains provision, to which neither government has so far had recourse, for the resolution of this dispute by arbitration between the two states. Nevertheless, Parker J. was beguiled into construing Bermuda 2 for himself as a result of which he reached the conclusion that the U.S. Government had committed no such breach. The interpretation of treaties to which the United Kingdom is a party but the terms of which have not either expressly or by reference been incorporated in English domestic law by legislation is not a matter that falls within the interpretative jurisdiction of an English court of law. In this House the contrary has not been contended and no arguments have been addressed to your Lordships directed to the construction of the language of Bermuda 2. In the United States, where Bermuda 2 is part of the domestic law, it may be that B.A. and B.C. will be able to rely upon its provisions as providing one or both of them with a defence in the American action; but that is not a matter upon which your Lordships can relevantly indulge in speculation.

Before passing from the proceedings before Parker 3. it is necessary to refer briefly to an argument advanced by B.C. that was additional to the ground relied upon by B.A. as well, with which I have up to now been dealing.

It is not alleged in the complaint in the American action that B.C., although a party to the combination and conspiracy to drive Laker out of the scheduled airline business as a competitor, had itself charged predatory fares; the part that it allegedly played was to put pressure on the potential participants in the scheme for the financial rescue of Laker to withdraw their support of it. B.C. contends that the evidence adduced by it and Laker in its civil action in the High Court make it manifest that Laker's inclusion of B.C. among the defendants in the American action is frivolous and vexatious. I do not doubt that if this could be established the High Court would not only have jurisdiction to enjoin Laker from proceeding with the American action against B.C. but also ought to exercise its discretion by doing so because of what an English court would be entitled to regard as the oppressive consequences that the American system of pre-trial discovery and non-recovery of costs by successful defendants will have upon a defendant to an action which is bound to fail. The decision of the Court of Appeal in Smith Kline & French Laboratories Ltd. v. Bloch [1983] 1 W.L.R. 730, restraining the defendant, Bloch, from proceeding in an action that he had started in an American court against an English company and its American parent company, may be accounted for on that ground in so far as it restrained Bloch from proceeding with his action in America against the American parent company. So far as the proceedings in America against the English company were concerned, Smith Kline & French was a plain case of forum conveniens; but as against the American parent company it may well have been a single forum case. If so, the decision was justifiable on the ground that the vexatious character of the proceedings against the American company was that its inclusion as defendants in the American proceedings was made mala fide for the sole purpose of laying an ostensible foundation for American jurisdiction for the claim against the English company.

My Lords, the answer to the B.C. contention that, on the evidence that was before Parker J. and is now before your Lordships, B.C. has no case to answer in the American action is that until pre-trial discovery in the form for which the Federal Rules of Procedure provide has been completed no one knows what evidence in support of its claim will have become available to Laker to put before the jury in the trial of the action in the District Court. To search for and obtain such evidence (which may be totally unknown to it at the time when, encouraged only by hopes entertained by its contingency-fee'd lawyer, Laker's action was launched) is what, in American proceedings, pre-trial discovery is for.

The point as to the prematureness of any consideration of absence of evidence against B.C. was taken in an affidavit of a lawyer that was filed on Laker's behalf in the civil action. It would, in my view, have sufficed to answer B.C.'s contention that they had established that the American action, so far as it included B.C. as a defendant, was frivolous or vexatious. However, Laker's advisers succumbed to the temptation to answer some of the evidence filed by B.C. in support of its contention; and in doing so Laker exhibited documentary material that had already been disclosed on pre-trial discovery by a fellow defendant to the action. If the facts stated in that material can be proved by admissible evidence at the trial, they would make out a prima facie case that what B.C. did in connection with the financial rescue scheme for Laker was done with the aim alleged in the complaint of driving Laker out of the scheduled airline business as a competitor. But whether this will turn out to be the case or not is not an issue to be decided in B.C.'s civil action against Laker in the High Court. It suffices to say, in agreement with Parker J. and the Court of Appeal, that this additional contention that is special to B.C. also fails.

My Lords, I can now turn to the steps taken by the Secretary of State under the Act of 1980, in the interval between the judgment of Parker J. and the hearing of the appeal in the Court of Appeal. These steps in the view of Sir John Donaldson M.R. [1984] Q.B. 142, 184, who delivered the judgment of that court, produced "a wholly different situation."

The relevant provisions of the Act are to be found in sections 1 to 6. The attack made in the application for judicial review of an order and two directions of the Secretary of State will make it necessary to set out the actual words of sections 1 and 2:

"1 (1) If it appears to the Secretary of State - (a) that measures have been or are proposed to be taken by or under the law of any overseas country for regulating or controlling international trade; and (b) that those measures, in so far as they apply or would apply to things done or to be done outside the territorial jurisdiction of that country by persons carrying on business in the United Kingdom, are damaging or threaten to damage the trading interests of the United Kingdom, the Secretary of State may by order direct that this section shall apply to those measures either generally or in their application to such cases as may be specified in the order. (2) The Secretary of State may by order make provision for requiring, or enabling the Secretary of State to require, a person in the United Kingdom who carries on business there to give notice to the Secretary of State of any requirement or prohibition imposed or threatened to be imposed on that person pursuant to any measures in so far as this section applies to them by virtue of an order under subsection (1) above. (3) The Secretary of State may give to any person in the United Kingdom who carries on business there such directions for prohibiting compliance with any such requirement or prohibition as aforesaid as he considers appropriate for avoiding damage to the trading interests of the United Kingdom. (4) The power of the Secretary of State to make orders under subsection (1) and (2) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. (5) Directions under subsection (3) above may be either general or special and may prohibit compliance with any requirement or prohibition either absolutely or in such cases or subject to such conditions as to consent or otherwise as may be specified in the directions; and general directions under that subsection shall be published in such manner as appears to the Secretary of State to be appropriate. (6) In this section 'trade' includes any activity carried on in the course of a business of any description and 'trading interests' shall be construed accordingly.

"2 (1) If it appears to the Secretary of State - (a) that a requirement has been or may be imposed on a person or persons in the United Kingdom to produce to any court, tribunal or authority of an overseas country any commercial document which is not within the territorial jurisdiction of that country or to furnish any commercial information to any such court, tribunal or authority; or (b) that any such authority has imposed or may impose a requirement on a person or persons in the United Kingdom to publish any such document or information, the Secretary of State may, if it appears to him that the requirement is inadmissible by virtue of subsection (2) or (3) below, give directions for prohibiting compliance with the requirement. (2) A requirement such as is mentioned in subsection (l)(a) or (b) above is inadmissible - (a) if it infringes the jurisdiction of the United Kingdom or is otherwise prejudicial to the sovereignty of the United Kingdom; or (b) if compliance with the requirement would be prejudicial to the security of the United Kingdom or to the relations of the government of the United Kingdom with the government of any other country. (3) A requirement such as is mentioned in subsection (l)(a) above is also inadmissible - (a) if it is made otherwise than for the purposes of civil or criminal proceedings which have been instituted in the overseas country; or (b) if it requires a person to state what documents relevant to any such proceedings are or have been in his possession, custody or power or to produce for the purposes of any such proceedings any documents other than particular documents specified in the requirement. (4) Directions under subsection (1) above may be either general or special and may prohibit compliance with any requirement either absolutely or in such cases or subject to such conditions as to consent or otherwise as may be specified in the directions; and general directions under that subsection shall be published in such manner as appears to the Secretary of State to be appropriate. (5) For the purposes of this section the making of a request or demand shall be treated as the imposition of a requirement if it is made in circumstances in which a requirement to the same effect could be or could have been imposed; and (a) any request or demand for the supply of a document or information which, pursuant to the requirement of any court, tribunal or authority of an overseas country, is addressed to a person in the United Kingdom; or (b) any requirement imposed by such a court, tribunal or authority to produce or furnish any document or information to a person specified in the requirement, shall be treated as a requirement to produce or furnish that document or information to that court, tribunal or authority. (6) In this section 'commercial document¹ and 'commercial information' mean respectively a document or information relating to a business of any description and 'document' includes any record or device by means of which material is recorded or stored."

Section 3 makes it an offence to fail without reasonable excuse to comply with any requirement imposed under section 1(2) or knowingly contravene a direction given under section 1(3) or section 2(1). Section 5 prohibits the enforcement in the United Kingdom of judgments of foreign courts for multiple damages or claims for contribution to damages awarded against another person in a multiple damage suit. This provision, as is well known, is specifically directed against antitrust actions brought in the United States of America under the Clayton Act; while section 6 gives to U.K. business enterprises (viz. United Kingdom citizens, companies incorporated in the United Kingdom and persons carrying on business there) who have paid multiple damages in a foreign suit a right of action justiciable in a court of the United Kingdom to recover against a person to whom such multiple damages were paid (whether he is within the jurisdiction of the High Court or not) such part of the multiple damages as exceeds the part attributable to compensation. This right of recovery of the non-compensatory element in the multiple damages does not apply where the person against whom multiple damages were awarded carried on business in the foreign country in which the proceedings against him were brought and these proceedings related exclusively to activities carried on in that country. The adverb "exclusively" prevents Laker's American action from falling within the exception.

In the instant cases, the Secretary of State made an order under section 1(1) of the Act entitled The Protection of Trading Interests (U.S. Antitrust Measures) Order 1983 that came into operation on 27 June 1973 and was in the following terms:

"Whereas it appears to the Secretary of State that the measures to which this Order relates have been taken by or under the law of the United States of America ('the United States') for regulating or controlling international trade and that those measures, in so far as they apply to things done or to be done outside the territorial jurisdiction of the United States by persons carrying on business in the United Kingdom, are damaging or threaten to damage the trading interests of the United Kingdom:

"Now therefore the Secretary of State, in exercise of his powers under section 1(1) of the Protection of Trading Interests Act 1980 ('the 1980 Act'.) and of all other powers enabling him in that behalf, hereby makes the following Order -

"1 (1) This Order may be cited as The Protection of Trading Interests (U.S. Antitrust Measures) Order 1983 and shall come into operation on 27 June 1983. (2) In this Order - 'the Bermuda 2 Agreement' means the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States signed at Bermuda on 23 July 1977, concerning air services; 'air service' and 'tariff shall be construed in accordance with the Bermuda 2 Agreement; 'United Kingdom designated airline' means a British airline (within the meaning of section 4(2) of the Civil Aviation Act 1982) designated by the Government of the United Kingdom under the Bermuda 2 Agreement.

"2 (1) The Secretary of State hereby directs that section 1 of the 1980 Act shall apply to sections 1 and 2 of the United States' Sherman Act and sections 4 and 4A of the United States' Clayton Act in their application to the cases described in the following paragraph. (2) The cases mentioned in paragraph (1) of this article are:

(i) an agreement or arrangement (whether legally enforceable or not) to which a United Kingdom designated airline is a party,

(ii) a discussion or communication to which a United Kingdom designated airline is a party,

(iii) any act done by a United Kingdom designated airline,

which, in respect of each case, concerns the tariffs charged or to be charged by any such airline or otherwise relates to the operation by it of an air service authorised pursuant to the Bermuda 2 Agreement."

He also gave general directions under section 1(5) and section 2(1) of the Act to come into operation on the same date as the order. The two directions were in the following terms respectively:

"GENERAL DIRECTION BY THE SECRETARY OF STATE (UNDER SECTION 1)

"WHEREAS the Secretary of State: (1) has directed that section 1 of the Protection of Trading Interests Act 1980 ('the 1980 Act') shall apply, in the circumstances specified by him, to sections 1 and 2 of the United States' Sherman Act and sections 4 and 4A of the United States' Clayton Act ('the U.S. antitrust measures'); (2) has considered the effect of the U.S. antitrust measures on United Kingdom designated airlines and in particular on their ability freely to participate in discussions or agreements relating to tariffs or other matters relating to the operation of air services authorised pursuant to the Bermuda 2 Agreement; (3) has considered the effect of the U.S. measures on the trading interests of the United Kingdom; (4) considers that the following direction is appropriate for avoiding damage to the trading interests of the United Kingdom:

"Now, therefore, the Secretary of State, in exercise of his powers under section 1(3) of the 1980 Act, hereby gives the following Direction -

"1. Except with the consent of the Secretary of State no person in the United Kingdom who carries on business there shall comply, or cause or permit compliance, with any requirement or prohibition imposed on that person pursuant to the U.S. antitrust measures in so far as such requirement or prohibition relates to or arises out of any of the cases described in article 2(2) of the Protection of Trading Interests (U.S. Antitrust Measures) Order 1983.

"2. Expressions used in this Direction shall have the meanings assigned to them by the Protection of Trading Interests (U.S. Antitrust Measures) Order 1983 for the purposes of that Order.

"3. This Direction shall come into operation on 27 June 1983."

"GENERAL DIRECTION BY THE SECRETARY OF STATE (UNDER SECTION 2)

"Whereas it appears to the Secretary of State: (a) that the United States' Department of Justice has begun an investigation into alleged price fixing and other allegations relating to the air transport of passengers over the North Atlantic for possible violations of sections 1 and 2 of the 'Sherman' Act; and that for this purpose a grand jury ('the grand jury') has been empanelled in the District of Columbia in the United States of America; (b) that a requirement may be imposed on a person or persons in the United Kingdom to produce or furnish to the United States' Department of Justice or the grand jury commercial documents or commercial information which are not within the territorial jurisdiction of the United States; (c) that civil antitrust proceedings of a penal nature are now pending in the United States' District Court for the District of Columbia ('the District Court') relating to similar matters to those which are the subject of the United States' Department of Justice investigation and that commercial documents and commercial information which are produced in the civil antitrust proceedings may be utilised in the Department of Justice investigation or before the grand jury; (d) that a requirement may be imposed on a person or persons in the United Kingdom to produce or furnish to the District Court documents or commercial information which are not within the territorial jurisdiction of the United States; (e) that any such requirements would be inadmissible within the meaning of section 2(2) and (3) of the Protection of Trading Interests Act 1980(a) (the '1980 Act'):

"Now, therefore, the Secretary of State, in exercise of his powers under section 2 of the 1980 Act, gives the following directions:

"1. Except with the consent of the Secretary of State no person or persons in the United Kingdom shall comply, or cause or permit compliance, whether by themselves, their officers, servants or agents, with any requirement to produce or furnish to the United States' Department of Justice, the grand jury or the District Court any document in the United Kingdom or any commercial information which relates to the said Department of Justice investigation or the grand jury or District Court proceedings.

"2. For the purpose of this direction and in relation to any requirement of the United States' Department of Justice, the grand jury or the District Court, the making of a request or demand or requirement to produce or furnish any document or information to a person specified in the requirement shall be treated as subsection (3) of section 2 of the 1980 Act treats such matters for the purposes of that section.

"3. Expressions used in this direction shall have the meanings assigned to them by the 1980 Act for the purposes of that Act.

"4. This Direction shall come into operation on 27 June 1983."

The judicial review Application

Since Laker alleged that the order and both directions were ultra vires and its application for judicial review of them was disposed of by the Court of Appeal at the same time as the appeals in the civil actions, an excursus on the validity of the order and directions seems appropriate at this point though it need only be short.

The first submission made on behalf of Laker was that the expression "measures . . . taken by or under the law of any overseas country" (Act of 1980, s.i(i)(a)) is not wide enough to include measures which take the form of legislation. This seems to me to be so plainly wrong as not to merit reasoned refutation. I content myself with expressing my agreement with what was said in the judgment of the Court of Appeal [1984] Q.B. 142, 196) in answer to this argument.

It was next submitted that the Secretary of State ought to have given reasons for making the order and each of the directions that were more explicit than those contained in the actual recitals to them, which do no more than state the conclusions that the Secretary of State has reached. This submission on behalf of Laker was based upon the minatory dictum of Lord Upjohn in Padfield v. Minister of Agriculture Fisheries, and Food [1968] AC 997, 1061-1062 that:

"if [a minister] does not give any reason for his decision it may be, if circumstances warrant it, that a court may be at liberty to come to the conclusion that he had no good reason for reaching that conclusion . . ."

The qualification made in the words that I have italicised in Lord Upjohn's dictum have the effect of equating it with, and adding , nothing to, a recognition of the Wednesbury principle (Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223) that a decision reached by a person upon whom a statute confers a discretion to exercise coercive powers over individuals may be held by a court of law to be ultra vires if it be established to the satisfaction of the court upon an application for judicial review that the decision is one that no reasonable person holding the office of minister upon whom the discretion is conferred could have reached. Where the decision is one which concerns international relations between the United Kingdom and a foreign sovereign state a very strong case needs to be made out to justify a court of law in holding the decision to be ultra vires under the Wednesbury principle. In the instant case, I agree with the Court of Appeal that Laker does not come anywhere near doing so.

The civil actions in the Court of Appeal

I return to the civil actions in the Court of Appeal. That court was much influenced by the metaphor "the critical equation" which had been used by Lord Wilberforce in The Atlantic Star [1974] A.C. 436, 468 and adopted by Lord Scarman in Castanho v. Brown & Root (U.K.) Ltd. [1981] A.C. 557, 574. As a metaphor drawn from mathematics its appropriateness to questions involved in forum conveniens cases in the context of which it was used is flawed by the fact that the essential characteristic of an equation is that there are two sides to it and each side is equal to the other; it is neither more nor less. In cases where there are alternative for a available one nevertheless understands the idea that it is meant to convey, whereas in a single forum case there are not even two sides for comparison with one another.

Under the cross-heading "The critical equation" (p. 199), the Court of Appeal in its judgment dealt first with the disadvantages to Laker of being forced to abandon the American action as against B.A. and B.C. These cannot be other than all one way, as the Court of Appeal appears to recognise. The judgment then went on to refer to the burden that the U.S. system for the administration of justice, in antitrust civil actions in particular, imposed upon defendants: three-fold damages, burdensome and ruinously expensive pre-trial discovery, the contingency basis on which such actions were undertaken by plaintiffs' attorneys, a costs system under which a successful defendant was entitled to recover a sum for costs that represented no more than an infinitesimal part of those that he had actually incurred. While expressly disclaiming any criticism of the American system of procedure in civil actions, the court considered that the existence of such burdens was a factor in B.A.'s and B.C.'s favour that ought to be taken into account on its side of the critical equation.

Likewise, the Court of Appeal appear to have considered that the fact that Laker, as a British airline designated under Bermuda 2, would be entitled to look to the United Kingdom Government for protection if it considered itself to be treated in the United States in an unfair way inconsistent with that treaty "cast some doubt on the legitimacy of the juridical advantage which [Laker] seek to preserve in the United States" (p.201). For my part, I fail to follow this reasoning unless it amounts to a variant of the "admission to membership of scheduled airlines' club" argument which I have rejected for reasons given earlier in this speech.

The Court of Appeal, however, do not state how they would have solved "the critical equation" if there had not been present in that equation by the time that the appeal reached them what they described as the "decisive factor" in favour of B.A. and B.C., viz. the effect of the order and directions.

Two reasons are relied on by the court for treating the order and the two directions as the decisive factor. With respect, I think that both these reasons are fallacious.

The first reason is that the direction under section 1(3) of the Act would prohibit B.A. and B.C. from satisfying any judgment given against them in the American action and thus render their aircraft liable to seizure in execution in the United States. This is based upon what, in my opinion, is a misconstruction of the Act which draws a clear distinction between "requirements" and "prohibitions" on the one hand and "judgments" on the other. The distinction between the former which are referred to as being "imposed" and the latter which are referred to as being "given" first appears in the long title of the Act itself. Sections 1 and 3 deal with requirements and prohibitions, which so far as is relevant to the instant appeal in the civil actions would be limited to pretrial, i.e. interlocutory, orders made in the American action by the U.S. District Court. Judgments are dealt with not in sections 1 to 3 but in sections 5 and 6; section 6 is drafted upon the assumption that a person carrying on business in the United Kingdom and a United Kingdom company or citizen commits no breach of English law by paying a foreign judgment for multiple damages in the country in which the judgment was given. It gives such person a remedy in the United Kingdom for recovering such sum included in the foreign judgment that he has paid as was not purely compensatory. The direction given under section 1(3) would not prohibit B.A. or B.C. paying in the United States any judgment for threefold damages given against them in the American action.

The second reason relied upon by the Court of Appeal is that the direction given under section 2 disables B.A. and B.C. from giving discovery of information and documents that would assist their defence in the American action. To this the short and realistic answer is that if the two companies think, as is claimed in an affidavit filed on behalf of B.A. in its civil action, that disclosure of particular documents or information would help their own defence rather than hinder Laker's ability to establish his complaint in the American action when it comes to trial, the direction enables them to apply to the Secretary of State for his consent to such disclosure, and since, to put it colloquially, the Secretary of State is "on their side," such consent would appear more likely than not to be forthcoming. So the order and directions, if they make any difference, operate to the disadvantage of Laker in the American action rather than that of B.A. and B.C. who, to the extent that they do not seek or are refused the Secretary of State's consent to disclosure of particular information or documents, will be saved the irrecoverable costs of pre-trial discovery on the American pattern of documents in their possession or control in the United Kingdom and of information known to their officers and employees in the United Kingdom who do not pay regular visits to the United States.

It was, no doubt for these reasons that at the hearing before your Lordships counsel for B.A. expressly disclaimed any reliance on the Court of Appeal's decision that the order and directions fundamentally changed the legal situation as it had been at the time of the trial when Parker J. exercised his discretion in favour of refusing the injunctions sought by B.A. and B.C. In the final analysis the case for B.A. presented before your Lordships stood or fell on the "admission to membership of the scheduled airlines' club" argument; and for reasons I have given I think that it fails. At the hearing in this House, I did not understand counsel for B.C. to dissociate himself from the disclaimer of reliance upon what the Court of Appeal considered to be the "decisive factor" justifying their overruling the discretion exercised by Parker 3. that was made by counsel for B.A. I understand that, since the close of the hearing, some postscriptial reservations have occurred to B.C.'s legal advisers, either English or American, but I have already given reasons why I think that such disclaimer was inevitable.

For my part I should allow Laker's appeals in both civil actions and discharge the injunctions granted by the Court of Appeal. I should dismiss Laker's appeal in the application for judicial review against the Secretary of State.

LORD FRASER OF TULLYBELTON

My Lords,

I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Diplock and Lord Scarman, and I agree with them. I would dispose of the appeals in the way that Lord Diplock has proposed.

LORD SCARMAN

My Lords,

I agree with the analysis of fact and law, the reasoning, and the conclusions in the speech of my noble and learned friend, Lord Diplock. I add a few observations only because I was the author of the dictum in Castanho v. Brown & Root (U.K.) Ltd. [1981] A.C. 557 at p.573, which may have to some extent misled the Court of Appeal.

The dictum has been quoted by my noble and learned friend and needs, therefore, no repetition. It enjoyed the unanimous approval of the House when delivered: and it is clear from my noble and learned friend's speech that it still enjoys his support and approval.

I would emphasise that it states an approach and a principle which are of general application. The approach has to be cautious because an injunction restraining a person within the jurisdiction of the English court from pursuing a remedy in a foreign court where, if he proves the necessary facts, he has a cause of action is, however disguised and indirect, an interference with the process of justice in that foreign court. Caution is needed even in a "forum conveniens" case, i.e., a case in which a remedy is available in the English as well as in the foreign court. Caution is clearly very necessary where there is no remedy in the English court in respect of the cause of action which, if the facts be proved, is recognised and enforceable by the foreign court.

Nevertheless, even in the latter case, the power of the English court to grant the injunction exists, if the bringing of the suit in the foreign court is in the circumstances so unconscionable that in accordance with our principles of a "wide and flexible" equity it can be seen to be an infringement of an equitable right of the applicant. The right is an entitlement to be protected from a foreign suit the bringing of which by the defendant to the application is in the circumstances unconscionable and so unjust. This equitable right not to be sued abroad arises only if the inequity is such that the English court must intervene to prevent injustice. Cases will, therefore, be few: but the jurisdiction exists and must be sustained. To the authorities which I quoted in Castanho's case as supporting the existence of the jurisdiction I would add the decision of your Lordships' House in Carron Iron Co. v. Maclaren (1855) 5 H.L.Cas. 416.

My Lords, Laker's American antitrust suit against the British companies, B.A. and B.C. is not unconscionable for the simple reason, which is exposed plainly by my noble and learned friend's analysis of the facts and relevant law, that the British companies, who became parties to the arrangement for fixing transatlantic fares made by the United Kingdom pursuant to the international agreement "Bermuda 2," accepted that they were subject, when operating and doing business within the territorial jurisdictions of the United States and United Kingdom, to the private law of the two states. The appropriate United States authority, the C.A.B., could lawfully have exempted the allegedly "predatory fares" agreement from the provisions of the U.S. antitrust laws, but did not do so. If this omission constituted a breach of Bermuda 2 (which itself is no part of our law) the remedy is by arbitration between the two states or by diplomatic action. English courts have no role to play in the resolution of any such dispute, important though it may be to the economic interests of the United Kingdom.

In my view B.A. and B.C. have failed to make a case of unconscionability. Having failed to establish the infringement of an equitable right, they are not entitled to relief by way of injunction from an English court. I would, therefore, allow the civil action appeals. I add, for the sake of completeness that I would, of course, dismiss Laker's appeal in the judicial review proceedings.

LORD ROSKILL

My Lords,

I have had the advantage of reading in draft the speech delivered by my noble and learned friend, Lord Diplock. I agree with it, and for the reasons he gives, I would dispose of these three appeals in the manner in which he proposes. I also agree with the speech of my noble and learned friend, Lord Scarman.

LORD BRIGHTMAN

My Lords,

I respectfully agree that these three appeals should be disposed of in the manner proposed by my noble and learned friend, Lord Diplock, for the reasons contained in his speech and in the speech of my noble and learned friend Lord Scarman.

British Caledonian Airways Limited (Respondents) v. Laker Airways Limited and others (Appellants) JUDGMENT Die Jovis 19° Julii 1984
Upon Report from the Appellate Committee to whom was referred the Cause British Caledonian Airways Limited against Laker Airways Limited and others, That the Committee had heard Counsel on Tuesday the 5th, Wednesday the 6th, Thursday the 7th, Monday the 11th, Tuesday the 12th, Wednesday the 13th, Thursday the 14th, Monday the 18th and Tuesday the 19th days of June last upon the Petition and Appeal of Laker Airways Limited (a company incorporated in Jersey in Liquidation) whose registered office is situate at Normandy House, St. Helier, Jersey, Channel Islands; Christopher Morris of Hill House, 1 Little New Street, London EC4; Laker Air Services Limited whose registered office is situate at Normandy House, St. Helier, Jersey, Channel Islands and Laker Airways (International) Limited whose registered office is situate at Hill House, 1 Little New Street, London EC4, praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 27th day of July 1983, might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of British Caledonian Airways Limited lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 27th day of July 1933 complained of in the said Appeal be, and the same is hereby, Set Aside, that the Injunction be, and the same is hereby, Discharged save insofar as that order set aside Mr. Justice Parker's temporary injunction and that the Stay granted by Mr. Justice Parker in his Order of the 20th day of May 1983 be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay or cause to be paid to the said Appellants the Costs incurred by them in the Courts below and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.

Cler: Parliamentor:

Laker Airways Limited and another (Appellants) v. Secretary of State for Trade and Industry (Respondent) JUDGMENT Die Jovis 19° Julii 1984
Upon Report from the Appellate Committee to whom was referred the Cause Laker Airways Limited and another against the Secretary of State for Trade and Industry, That the Committee had heard Counsel on Tuesday the 5th and Wednesday the 6th days of June last upon the Petition and Appeal of Laker Airways Limited (a company incorporated in Jersey in Liquidation) whose registered office is situate at Normandy House, St. Helier, Jersey, Channel Islands, and Christopher Morris of Hill House, 1 Little New Street, London EC4 praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 27th day of July 1983, might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of the Secretary of State for Trade and Industry lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 27th day of July 1983 complained of in the said Appeal be, and the same is hereby, Affirmed and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay or cause to be paid to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments if not agreed between the parties.

Cler: Parliamentor:

British Airways Board (A Body Corporate) (Respondents) v. Laker Airways Limited and others (Appellants) JUDGMENT Die Jovis 19° Julii 1984
Upon Report from the Appellate Committee to whom was referred the Cause the British Airways Board against Laker Airways Limited and others, That the Committee had heard Counsel on Tuesday the 5th, Wednesday the 6th, Thursday the 7th, Monday the 11th, Tuesday the 12th, Wednesday the 13th, Thursday the 14th, Monday the 18th and Tuesday the 19th days of June last upon the Petition and Appeal of Laker Airways Limited (a company incorporated in Jersey in Liquidation) whose registered office is situate at Normandy House, St. Helier, Jersey, Channel Islands; Christopher Morris of Hill House, 1 Little New Street, London EC4; Laker Air Services Limited whose registered office is situate at Normandy House, St. Helier, Jersey, Channel Islands and Laker Airways (International) Limited whose registered office is situate at Hill House, 1 Little New Street, London EC4, praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 27th day of July 1983, might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of the British Airways Board (a Body Corporate) lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 27th day of July 1983 complained of in the said Appeal be, and the same is hereby, Set Aside, that the Injunction be, and the same is hereby, Discharged save insofar as that order set aside Mr. Justice Parker's temporary injunction and that the Stay granted by Mr. Justice Parker in his Order of the 20th day of May 1983 be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay or cause to be paid to the said Appellants the Costs incurred by them in the Courts below and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.

Cler: Parliamentor: