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- Kembaraxtra-Case Law-Factortame (No. 3) - C-221/89 - Study Guide
Case Overview- Citation: R v Secretary of State for Transport, ex p Factortame Ltd (No 3): C-221/89, [1992] QB 680, [1991] 3 All ER 769, [1991] ECR I-3905
- Court: Court of Justice of the European Communities (CJEU)
- Judgement Date: 25 July 1991
- Compatibility of the Merchant Shipping Act 1988 (Part II) with European Community (EC) law, specifically:
- Freedom of Establishment (Article 52 EEC Treaty).
- Non-Discrimination on Grounds of Nationality (Article 7 EEC Treaty).
- Member state's power to determine nationality requirements for fishing vessel registration vs. adherence to Community Law.
- Common Fisheries Policy: The EC had established quotas for national fishing fleets to prevent overfishing.
- Merchant Shipping Act 1988 (UK): Enacted to protect British fishing interests by restricting the number of vessels counting towards the UK's quota.
- Established a new register of British fishing vessels.
- Required vessels to re-register under the new Act.
- Registration Requirements:
- Owners (or 75% of shareholders in the case of companies) had to meet British nationality, residence, and domicile requirements.
- Vessels had to be managed and controlled from Britain.
- Factortame's Challenge:
- Factortame Ltd., owned/managed 95 fishing vessels registered as British.
- Most directors/shareholders were Spanish nationals.
- Could not meet the new registration requirements.
- Argued the Act violated their rights under EC law:
- Non-discrimination (Article 7).
- Freedom of Establishment (Articles 52 and 221).
- Factortame: The 1988 Act contravened rights under the EEC Treaty, specifically the right to non-discrimination based on nationality and the right to establish a business in another member state.
- Secretary of State: Community law does not restrict a member state's right to determine nationality or which vessels can fly its flag. The 1988 Act aligns with the Common Fisheries Policy.
- Member states can determine registration conditions under international law, but must comply with Community law.
- The UK's registration requirements (nationality, residence, domicile) were deemed contrary to Community Law, specifically Article 52 (Freedom of Establishment).
- These requirements violated the principles of freedom of establishment and non-discrimination against nationals of other member states.
- The Secretary of State's power to waive nationality requirements did not justify a nationality-based system.
- However, the requirement for management and control of the vessel from within the member state was deemed not contrary to Community Law.
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