R v Secretary of State for Transport, ex parte Factortame Ltd (No 1) [1990] 2 AC 85
Facts
Factortame and other companies operated fishing vessels previously registered as British. The Merchant Shipping Act 1988 introduced new registration conditions involving nationality, residence and control. Their vessels failed to satisfy the requirements, threatening their ability to continue fishing. The applicants challenged the legislation as inconsistent with Community rights. The Divisional Court referred substantive questions to the Court of Justice and granted interim protection, but that relief was overturned on appeal. The House of Lords then considered whether English law permitted an interim order against the statutory scheme while the EU-law questions remained unresolved.
Legal Issue
Could interim protection be granted against the statutory registration requirements under English law, or did the question of an EU-law power require a preliminary reference?
Held
The House of Lords held that ordinary English law did not provide the requested power to suspend the clear statutory requirements or grant the injunction sought against the Crown. Lord Bridge distinguished that domestic position from the separate question whether Community law required a remedy protecting the applicants' claimed rights. The answer on EU law was not sufficiently clear for the House to decide without a reference. It therefore referred the interim-relief questions to the Court of Justice and adjourned further consideration. This first decision did not finally reject EU protection or establish the later injunction. It identified the domestic obstacle and asked whether EU law required that obstacle to be set aside.
⭐ Legal Principle
Factortame (No 1) distinguishes the domestic obstacle to interim relief from the potential obligation arising under Community law. Where the EU-law position required authoritative interpretation, the House of Lords referred the question instead of treating the national restriction as a conclusive answer.
Significance
The sequence of the Factortame litigation matters. The Court of Justice subsequently held in C-213/89 that a national rule must be set aside when it is the sole obstacle to otherwise appropriate interim protection of Community rights. The House of Lords later granted relief in Factortame (No 2). No 1 therefore explains the reference that produced the constitutional development; its statement of the initial domestic position must not be presented as the final outcome or an unrestricted statement of current post-withdrawal law.
Common exam questions about this case
Did Factortame (No 1) itself grant the famous injunction?
No. It identified the lack of an ordinary domestic power and referred the EU-law question. The subsequent Court of Justice ruling required a national obstacle to be set aside where it alone prevented otherwise appropriate interim relief, and the House of Lords then granted relief in No 2. The stages must be kept separate.
Why was a preliminary reference necessary?
The House of Lords considered the Community-law basis for interim protection insufficiently clear to determine without the Court of Justice's interpretation. The domestic rule therefore did not end the inquiry. The reference asked whether EU law empowered or required the court to protect claimed rights pending the answer on their substantive existence.
What did the later Court of Justice decision add?
It established that a national court must set aside a domestic rule when that rule is the sole obstacle to granting interim relief in a case governed by Community law. The requirement protected the effectiveness of the eventual judgment. It did not mean that every applicant claiming an EU right automatically received an injunction.