Factortame Ltd and others v Secretary of State for Transport  2 All ER 692
LORD BRIDGE OF HARWICH:....It is estimated that the preliminary ruling requested by the Divisional Court from the European Court will not be given for two years from the date when the reference is made. The applicants claim that unless they are protected during this period by an interim order which has the effect of enabling them to continue to operate their 95 vessels as if they were duly registered British fishing vessels (which would be necessary to enable them to continue to hold licences to fish against the British quota of controlled stocks of fish) they will suffer irreparable damage. The vessels are not eligible to resume the Spanish flag and fish against the Spanish quota. To lay the vessels up pending the ruling of the European Court would be prohibitively expensive. The only practical alternative would be to sell the vessels or the Spanish holdings in the companies owning the vessels in what would be a glutted market at disastrously low prices. In addition many of the individual applicants are actively engaged in the operation and management of the vessels and would lose their livelihood. No doubt has been cast on the factual accuracy of these claims and I approach the question of interim relief on the footing that they are well founded. Moreover, as the law presently stands on the authority of Bourgoin SA v Ministry of Agriculture Fisheries and Food  3 All ER 585, the applicants would have no remedy in damages for losses suffered pending the ruling of the European Court.
It is more difficult to assess, in practical terms, the adverse consequences of granting interim relief if the preliminary ruling of the European Court is in the event given in favour of the Secretary of State. Certainly there is no question of requiring from the applicants a cross-undertaking in damages, since it would be impossible to identify any damage sustained by individuals in the British fishing industry as a result of the continued operation of the applicants' vessels. But it is right to recognise that the policy of Her Majesty's government indorsed by Parliament in Pt II of the 1988 Act is to ensure that the quota of controlled stocks of fish allocated to the United Kingdom in accordance with the common fisheries policy, of which a sizeable proportion is presently taken by the applicants, should be fully available to be enjoyed by those engaged in the British fishing industry.
The familiar situation in English law in which the question arises whether or not an interim injunction should be made to protect some threatened right of the plaintiff or applicant for judicial review is one in which the facts on which the right depends are in dispute and the court cannot proceed immediately to the trial which will resolve that dispute. In this situation the court has a discretion to grant or withhold interim relief which it exercises in accordance with the principles laid down by your Lordships' House in American Cyanamid Co v Ethicon Ltd  1 All ER 504. In deciding on a balance of convenience whether or not to make an interim injunction the court is essentially engaged in an exercise of holding the ring. In private law as between private parties the plaintiff will be required, if granted interim relief, to give a cross-undertaking in damages and the court is thus enabled to make a pragmatic decision as to who is likely to suffer the greater injustice, the plaintiff on the one hand if interim relief is withheld and he eventually establishes his right but is left to his remedy in damages or the defendant on the other hand if he is wrongly restrained in the interim and he is left to his remedy in damages on the plaintiff's cross-undertaking.
The situation which arises in the present case is fundamentally different from this familiar situation in two respects. The first which I wish to examine is that the dispute on which the existence or non-existence of the rights for which the applicants claim protection depends is one of law, not of fact, and the postponement of the resolution of that dispute arises, of course, from the necessity to seek a preliminary ruling from the European Court under art 177.
By virtue of s 2(4) of the 1972 Act Pt II of the 1988 Act is to be construed and take effect subject to directly enforceable Community rights and those rights are, by s 2(1) of the 1972 Act, to be 'recognised and available in law, and enforced, allowed and followed accordingly'. This has precisely the same effect as if a section were incorporated in Pt II of the 1988 Act which in terms enacted that the provisions with respect to registration of British fishing vessels were to be without prejudice to the directly enforceable Community rights of nationals of any member state of the EEC. Thus it is common ground that, in so far as the applicants succeed before the European Court in obtaining a ruling in support of the Community rights which they claim, those rights will prevail over the restrictions imposed on registration of British fishing vessels by Pt II of the 1988 Act and the Divisional Court will, in the final determination of the application for judicial review, be obliged to make appropriate declarations to give effect to those rights.
It is difficult to envisage a parallel situation arising out of the disputed construction of an English statute not involving any question of Community law which would call for a decision whether or not the court could grant interim relief of the kind which the applicants are seeking here. Suppose that an English statute contained two sections allegedly in conflict with each other, one clear and unambiguous in its terms, the other of doubtful import. If an English court were faced with a claim by a party litigant to rights granted by the doubtful section which were denied by the unambiguous section, the court confronted with the issue at any level would decide it and no question of interim relief could possibly arise....
[A]n order granting the applicants the interim relief which they seek will only serve their purpose if it declares that which Parliament had enacted to be the law from 1 December 1988, and to take effect in relation to vessels previously registered under the 1894 Act from 31 March 1989, not to be the law until some uncertain future date. Effective relief can only be given if it requires the Secretary of State to treat the applicants' vessels as entitled to registration under Pt II of the 1988 Act in direct contravention of its provisions. Any such order, unlike any form of order for interim relief known to the law, would irreversibly determine in the applicants' favour for a period of some two years rights which are necessarily uncertain until the preliminary ruling of the European Court has been given. If the applicants fail to establish the rights they claim before the European Court, the effect of the interim relief granted would be to have conferred on them rights directly contrary to Parliament's sovereign will and correspondingly to have deprived British fishing vessels, as defined by Parliament, of the enjoyment of a substantial proportion of the United Kingdom quota of stocks of fish protected by the common fisheries policy. I am clearly of the opinion that, as a matter of English law, the court has no power to make an order which has these consequences.
It follows that this appeal must fall to be dismissed unless there is, as the applicants contend, some overriding principle derived from the jurisprudence of the European Court which compels national courts of member states, whatever their own law may provide, to assert, and in appropriate cases to exercise, a power to provide an effective interlocutory remedy to protect putative rights in Community law once those rights have been claimed and are seen to be seriously arguable, notwithstanding that the existence of the rights is in dispute and will not be established unless and until the European Court so rules.....
I turn finally to consider the submission made on behalf of the applicants that, irrespective of the position under national law, there is an overriding principle of Community law which imposes an obligation on the national court to secure effective interim protection of rights having direct effect under Community law where a seriously arguable claim is advanced to be entitled to such rights and where the rights claimed will in substance be rendered nugatory or will be irremediably impaired if not effectively protected during any interim period which must elapse pending determination of a dispute as to the existence of those rights. The basic propositions of Community law on which the applicants rely in support of this submission may be quite shortly summarised. Directly enforceable Community rights are part of the legal heritage of every citizen of a member state of the EEC. They arise from the EEC Treaty itself and not from any judgment of the European Court declaring their existence. Such rights are automatically available and must be given unrestricted retroactive effect. The persons entitled to the enjoyment of such rights are entitled to direct and immediate protection against possible infringement of them. The duty to provide such protection rests with the national court. The remedy to be provided against infringement must be effective, not merely symbolic or illusory. The rules of national law which render the exercise of directly enforceable Community rights excessively difficult or virtually impossible must be overridden.
Counsel for the applicants, in a most impressive argument presented in opening this appeal, traced the progressive development of these principles of the jurisprudence of the European Court through a long series of reported decisions on which he relies. I must confess that at the conclusion of his argument I was strongly inclined to the view that, if English law could provide no effective remedy to secure the interim protection of the rights claimed by the applicants, it was nevertheless our duty under Community law to devise such a remedy. But the Solicitor General, in his equally impressive reply, and in his careful and thorough analysis of the case law, has persuaded me that none of the authorities on which counsel for the applicants relies can properly be treated as determinative of the difficult question, which arises for the first time in the instant case, of providing interim protection of putative and disputed rights in Community law before their existence has been established. This is because the relevant decisions of the European Court, from which the propositions of Community law asserted by counsel for the applicants are derived, were all made by reference to rights which the European Court was itself then affirming or by reference to the protection of rights the existence of which had already been established by previous decisions of the European Court.
In the light of the course which I propose that your Lordships should take, it would serve no useful purpose for me to attempt an analysis of the voluminous Community case law to which the main arguments have been directed. It is significant to note, however, that Community law embodies a principle which appears closely analogous to the principle of English law that delegated legislation must be presumed to be valid unless and until declared invalid. In Granaria BV v Hoofdproduktschap voor Akkerpbouwprodukten Case 101/78  ECR 623 the validity of a regulation made by the EEC Council was challenged in proceedings before the court of a member state. In answering questions referred to it under art 177 of the EEC Treaty the European Court held that every regulation which is brought into force in accordance with the Treaty must be presumed to be valid and must be treated as fully effective so long as a competent court has not made a finding that it is invalid. On the other hand, in Firma Foto-Frost v Hauptzollamt Lübeck-Ost Case 314/85  3 CMLR 57 at 80 the Court of Justice said in giving judgment, again on a reference under art 177:
"It should be added that the rule that national courts may not themselves declare Community acts invalid may have to be qualified in certain circumstances in the case of proceedings relating to an application for interim measures; however, that case is not referred to in the national court's question".
In the light of these two authorities and in application of the principles laid down by the European Court in Srl CILFIT v Ministry of Health Case 283/81  ECR 3415, I do not think that it is open to your Lordships' House to decide one way or the other whether, in relation to the grant of interim protection in the circumstances of the instant case, Community law overrides English law and either empowers or obliges an English court to make an interim order protecting the putative rights claimed by the applicants. It follows, I think, that your Lordships are obliged under art 177 of the Treaty to seek a preliminary ruling from the European Court. I would propose that the questions to be referred should read as follows:
(1) Where-(i) a party before the national court claims to be entitled to rights under Community law having direct effect in national law (the rights claimed), (ii) a national measure in clear terms will, if applied, automatically deprive that party of the rights claimed, (iii) there are serious arguments both for and against the existence of the rights claimed and the national court has sought a preliminary ruling under art 177 whether or not the rights claimed exist, (iv) the national law presumes the national measure in question to be compatible with Community law unless and until it is declared incompatible, (v) the national court has no power to give interim protection to the rights claimed by suspending the application of the national measure pending the preliminary ruling, (vi) if the preliminary ruling is in the event in favour of the rights claimed, the party entitled to those rights is likely to have suffered irremediable damage unless given such interim protection, does Community law either (a) oblige the national court to grant such interim protection of the rights claimed or (b) give the court power to grant such interim protection of the rights claimed?
(2) If question 1(a) is answered in the negative and question 1(b) in the affirmative, what are the criteria to be applied in deciding whether or not to grant such interim protection of the rights claimed?
The adjournment of further consideration of the appeal, which must necessarily follow is, I recognise, a most unsatisfactory result from the applicants' point of view, and I venture to express the hope that the European Court will, so far as their procedures permit, treat the reference made by your Lordships' House as one of urgency to which priority can be given.