Adam Opel GmbH v Mitras Automotive

Adam Opel GmbH v Mitras Automotive Ltd [2007] EWHC 3205 (QB)

Contract Contract – Duress – Economic duress – Commercial pressure – Threats of Cession to Supply

Facts:

Mitras was in the business of manufacturing automotive parts and was the sole supplier of a particular part. Adam decided to source the part from a new supplier, as they began manufacturing a new model and advised Mitras they would be terminating the supply contract. Mitras made several demands for payments on the basis that the amortisation of the development costs had been based on the supply. Adam offered costs substantially lower than what Mitras were claiming. Mitras provided Adam with an option to either accept the price or source the goods elsewhere. Adam paid their demands for fear of not being supplied with the goods for the remainder of the year. They claimed duress. Mitras argued that Adam had the realistic option of pursuing other alternatives and that there was no duress.

Issues:

Whether Adam made the payments to Mitras under duress.

Held:

Judgment was awarded in favour of Adam and duress was found to have compelled Adam to pay the money to Mitras. The causes required for a finding of duress were applied from the case of DSND Subsea Ltd (formerly known as DSND Oceantech Ltd) v Petroleum Geo Services ASA [2000] BLR 530, in that there needs to be a lack of practical choice for the victim which is illegitimate and a major clause in inducing the victim to enter into the contract. Adam paid the money so that Mitras would continue the supplies of the goods and was unable to find an alternative supplier as Mitras was the sole supplier of the item. This was illegitimate pressure in the circumstances.