Duress

 Duress is an Illegitimate commercial pressure if exercised by one of the contracting

parties can be used as a means of setting aside the contract between two parties
(Atlas Express v Kafco Ltd (1989))
 Econmic duress can be summarized to embody a situation where one party uses
his superior economic power in illegitimate way so as to coerce the other party to
agree to a particular set of terms.
 Requirements for Economic Duress:
(1) A coercion of the will which vitiates the consent
Occidental Worldwide Investment v Skibs (The Sibeon & The Sibotre)
(1976)
 The defendants chartered two vessels from the claimant.
 The defendants told the claimants that they would go bankrupt if
they did not lower the cost of charter.
 This was completely untrue.
 The claimants feared that they would lose valuable customers and
they were also were owed substantial amounts of money by the
defendant which they feared they would lose if the defendantsdid
become insolvent.
 The claimants therefore agreed to renegotiate the contract to
lower the cost of charter.
 They later sought to have the renegotiated contract set aside.
 Held:
 Whilst recognising that it would be possible to render a
contract voidable for economic duress, it was not
established in this case.
 To amount to economic duress there had to be a
coercion of the will so as to vitiate consent.
Commercial pressure was not sufficient.
 Kerr J appears to place much emphasis on whether the
party relying on duress had made any protest at the
time of the alleged threat of economic duress or
shortly thereafter.
 He also looked at the possibility on whether or not the
person alleging economic duress had treated the
settlement as closing the transaction in question and
as binding upon him or whether he made clear that the
issue was still open
Note: This was the first case where economic duress was recognized as
giving rise to a cause of action.
More recent cases look to absence of choice rather than coercion of the
will vitiating consent.
Universe Tankships v International Transport Workers Federation, The
Universe Sentinel (1983)
 The ITWF blacked a ship, The Universe Sentinel, to prevent it
from leaving port.
  They made several demands in relation to pay and conditions and
also demanded the ship owners pay a large sum of money to the
Seafarers International Welfare Fund.
 The ship owners agreed in order that the ship could leave port and
then sought to recover the sum paid to the welfare fund.
 Held:
 The money had been extracted under economic duress and
could be recovered.
 The House of Lords held that earlier case law had been
wrong to look at coercion of the will so as to vitiate consent.
During an analogy with the defence in criminal law where
it is recognised that a defendant acting under duress has
the intention to commit the offence but is excused from the
crime because they had no choice but to submit.
 Accordingly two elements of duress were identified:
1. Compulsion of the will - absence of choice
2. Illegitimacy of the pressure
 Pakistan International Airline Corp v Times Travel (2021)
The Respondent, Pakistan International Airline Corporation ("PIAC"), had
entered into a contract with the Appellant, Times Travel (UK) Ltd ("Times
Travel"), pursuant to which Times Travel would act as ticketing agent to
PIAC. Times Travel was a small family-owned travel agency. Its business
was very largely dependent on its ability to sell PIAC's tickets. By 2012, a
large number of PIAC's ticketing agents had either commenced or
threatened proceedings to recover substantial sums they said PIAC owed
to them by way of commission.
In September 2012, PIAC gave lawful notice of the termination of its
existing agency contracts and offered Times Travel a new contract. The
new contract contained a waiver by Times Travel of its claims for unpaid
commission under the prior arrangements. Times Travel accepted and
signed the new contract.
In 2014, Times Travel brought proceedings to recover unpaid commission
and other payments which it said were due to it under the prior contractual
arrangements. At first instance, the High Court held that Times Travel was
entitled to avoid the contract with PIAC on the grounds of economic
duress.
The Court of Appeal allowed PIAC's appeal. Times Travel now appeals
to the Supreme Court.
The main difficulty in this area is to draw a line between unacceptable
commercial pressures (which amount to economic duress) and
acceptable commercial pressures (which do not amount to economic
duress): ‘illegitimate pressure must be distinguished from the rough and
tumble of the pressures of normal commercial bargaining’
In the Pakistan International case the Supreme Court stated that the
elements required for economic duress were:
(1) The making of an illegitimate threat ‘
 (2) Sufficient causation between the threat and the
threatened party entering the contract/making a
payment
(3) The lack of any reasonable alternative to giving in to the threat.
With respect to the first requirement. most cases of
economic duress haveinvolved a threat to breach a pre-
existing contract. In Pakistan International the central legal
issue was whether a threat to do somethingthat a party
was otherwise legally entitled to do (so called ‘legal act
duress’) was capable of constituting duress
It was held that such a threat would be illegitimate if it
amounted to the kind of reprehensible or unconscionable
conduct that would amount to undue influence. However,
when, as in this case, the defendant genuinelybelieved that
its failure to pay commissions earned in the past did not
constitute a breach of contract on their part, there was no
illegitimate threat.
 It should be noted that the recent decision of Supreme Court
making distinction as to legitimate and illegitimate pressure is
welcomed since it shows the court isindifferent towards legitimate
pressure
 Hence the application of Williams v Roffey brothers after the
2021 decision will be even more better in fulfilling the aspiration
of modification of contracts withoutany hurdle.