## Facts

- Mogul Steamship Co., an independent carrier in the China–London tea trade, competed with a group of shipowners organized in a “conference” to secure cargo for members at profitable rates.
- Conference members agreed to regulate sailings, allocate cargoes, and set freight rates.
- The conference offered shippers a 5% rebate if they shipped exclusively with conference members.
- Member agents were prohibited, on threat of dismissal, from acting for competing shipowners.
- When Mogul entered the relevant ports seeking tea cargo, conference members responded by sending additional ships and underbidding Mogul’s rates, allegedly forcing Mogul to carry at unremunerative rates.
- The conference notified shippers that the rebate would be withheld if they used Mogul’s vessels.
- Mogul alleged a combination aimed at controlling the trade and driving Mogul from the market; the defendants’ motive was commercial advantage rather than personal ill-will.
- The trial court entered judgment for the defendants; the Court of Appeal affirmed by majority; the House of Lords affirmed.

## Issues

1. Whether a combination of competitors using coordinated pricing, exclusive rebates, and pressure on agents and shippers constituted an actionable conspiracy to injure a rival’s trade.
2. Whether aggressive, exclusionary competition causing severe economic loss is a civil wrong when carried out without fraud, violence, or actionable intimidation.
3. Whether the conference arrangements were an unlawful restraint of trade sufficient to support damages.

## Decision

- The Court of Appeal (majority) affirmed judgment for the defendants, characterizing the conduct as lawful competition pursued in the defendants’ own commercial interest without unlawful means.
- The House of Lords dismissed Mogul’s appeal and affirmed, holding that the defendants’ object—protecting and extending their trade and increasing profits—was lawful.
- Because the defendants did not employ independently unlawful means (e.g., fraud, violence, or actionable intimidation), Mogul had no cause of action.
- Mogul’s losses were treated as damnum sine injuria (harm without a legally cognizable injury).

## Legal Principles

- A conspiracy is actionable only if (a) the agreed object is unlawful, or (b) lawful acts are pursued by unlawful means.
- Competition may be intentional and severe; it is not tortious merely because it is designed to divert business and harms a rival, so long as it uses lawful means and serves a trader’s legitimate self-interest.
- Economic loss from coordinated price-cutting and exclusive dealing arrangements is not recoverable absent an independent wrong such as fraud, misrepresentation, violence, obstruction recognized by law, actionable intimidation, or intentional procurement of a violation of another’s legal rights.
- The law distinguishes between protection of a trader’s freedom to conduct business and the limits imposed by wrongful means; harm alone does not establish liability.

## Conclusion

The courts held that coordinated, exclusionary competitive practices by a shipping conference—implemented to secure business and increase profits—did not create tort liability because the scheme pursued a lawful commercial object and used no unlawful means; the plaintiff’s resulting losses were non-compensable as damnum sine injuria.


Mogul S.S. Co. v. McGregor, Gow & Co., 23 Q.B.D. 598 (C.A. 1889), aff'd, [1892] A.C. 25 (H.L.)