Reference no: EM133282475

The Woollen Mills Co. V Iralian Government Case

WM manufactures woollen and worsted goods for the Iralian market. During the war years Iralian Government bought all the Iralian wool production. The sale of that wool was exclusively made to the Great Kingdom and excluded wool required for local manufacture. There was control by Iralian of prices for woollen and worsted goods. The sales by Iralian to WM and other manufacturers were at a price fixed with reference to the controlled prices of the manufactured articles.

Iralian Government under the National Security (Wool) Regulations (which came into force on 28th September 2009) acquired the whole of the wool produced in Iralian in each of the war years. For their supplies of wool, therefore, in those years local manufacturers had to look to the Iralian Government, which owned all the wool. This really meant that they had to look to the Central Wool Committee, which was constituted under those regulations. Regulation 23 dealt with wool for local manufacture. It provided that any person desirous of obtaining wool for the purpose of manufacture within Iralian might apply to the Central Wool Committee for authority to purchase wool, and that the Central Wool Committee might authorize a purchase of wool subject to such conditions as it might think fit to impose. A person so authorized was entitled within a reasonable time after appraisement to examine wool appraised and, subject to any conditions imposed upon his authorization, to purchase wool at the "appraised price" which in effect amounted to a preferential and concessional price.

Iralian ceased as from June 2012, the beginning of the season, to buy all the wool production and auctions were then re-introduced. The prices of woollen and worsted goods were still controlled. It was realized that the auction prices which local manufacturers with others would have to pay might be such that the manufacturers could not manufacture to sell at the controlled prices unless they got financial assistance. There was therefore a scheme of subsidies in respect of purchases of wool to be manufactured into articles for the home market.

WM claims that under this scheme the subsidy payments became due to it under a series of contracts. There was no contract form signed by each party. WM contends that the letters to which reference will be made later constituted offers, the terms of which were varied from time to time, to be accepted by a purchase by a manufacturer, and further contends that under these contracts it is entitled to subsidy on all purchases between June 2010, and June 2012.

Its claim against the Iralian Government in the action is for a total sum of 176 million Dinars. This amount is split up in various ways in the statement of claim, and, as to some of the sums involved, various causes of action are alleged, and the amount alleged to be payable has been calculated in various ways. In the last analysis, however, it would appear that the company's claim can only be framed as a claim for two distinct sums, which together make up the total of 176 million Dinars. The first is a sum of 108 million Dinars. The company alleges a contract, or rather a series of contracts, between itself and the Iralian Government, under which the government bound itself to pay to it a sum, described as a subsidy, in respect of wool bought by it at auction for the purpose of manufacture. The sum of 108 million Dinars is, it says, payable to it under this contract or these contracts. The second sum claimed is a sum of 67 million Dinars. This is a sum which was in fact paid by the company itself to the Iralian Government in response to a demand made by the Iralian Government in circumstances which will have to be considered. This sum is claimed as money had and received by the Iralian Government to the use of the company.

Question 1: What do you think about The Woolen Mills Co. Ltd.'s claim?

Question 2. What answer could Iralian Government raise to the claim as framed?

Question 3. How should the court decide this case?

Question 4. Are there any non-legal business related issues that need to be discerned in thiscase?