## Facts

- The UK Parliament enacted the Merchant Shipping Act 1988 to restrict foreign ownership of UK fishing vessels.
- Spanish fishing companies, operating through UK-registered subsidiaries, challenged the Act, claiming it discriminated based on nationality and breached European Community (EC) law principles of freedom of establishment and equal treatment as set out in the Treaty of Rome.
- The claimants sought an interim order preventing the enforcement of the Merchant Shipping Act 1988 while the compatibility of the Act with EC law was determined.
- The High Court referred the matter to the European Court of Justice (ECJ) under Article 234 (formerly Article 177) of the Treaty on the Functioning of the European Union for interpretation of relevant EC laws.
- The House of Lords was faced with the issue of whether to grant interim relief, which would entail suspending the operation of an Act of Parliament.

## Issues

1. Whether UK courts could grant interim relief to suspend the operation of an Act of Parliament that appeared to conflict with directly effective EC law.
2. Whether directly effective EC law had priority over conflicting UK statutes.
3. How the traditional principle of parliamentary sovereignty was affected by the UK's obligations under the European Communities Act 1972 and EC law.

## Decision

- The ECJ ruled that the Merchant Shipping Act 1988 conflicted with EC law and that EC law would have priority.
- The House of Lords decided that courts could disapply parts of the Merchant Shipping Act 1988 to comply with directly effective provisions of EC law.
- UK courts were required to set aside national legislation that conflicted with directly applicable EC law.
- The decision marked a shift in constitutional understanding by allowing UK courts to refuse to apply Acts of Parliament inconsistent with EC law.

## Legal Principles

- EC law, when directly effective, takes precedence over domestic UK statutes where there is conflict.
- The European Communities Act 1972 incorporated EC law into UK law, creating circumstances in which parliamentary sovereignty was limited by international obligations undertaken by the UK.
- National courts have the authority and duty to disapply national legislation that conflicts with directly effective EC law.

## Conclusion

R v Secretary of State for Transport, ex parte Factortame Ltd (No 1) [1990] fundamentally redefined the relationship between UK parliamentary sovereignty and European Community law, establishing the principle that directly effective EU law overrides conflicting national legislation and that UK courts are empowered to disapply domestic statutes to ensure compliance with EU obligations.

R v Secretary of State for Transport, ex parte Factortame Ltd [1990] 2 AC 85 (HL)