Continental Tyre and Rubber Co Ltd supplied tyres to Daimler, but Daimler was concerned that making payment might contravene a common law offence of trading with the enemy as well as a proclamation issued under s 3 (1) Trading with the Enemy Act 1914.

At first instance, Scrutton J approved the decision of the master, that the contracts were valid, for summary judgment without proceeding to trial.

It is not a mere name or mask or cloak or device to conceal the identity of persons and it is not suggested that the company was formed for any dishonest or fraudulent purpose.

Buckley LJ delivered a dissenting judgment, would have held that though the company is a legal person existing apart from its corporators, that it still had enemy character.

These considerations seem to me essential to bear in mind in determining the present case.The House of Lords unanimously reversed the decisions below, saying the secretary was authorised to commence no action.

I think that the analogy is to be found in control, an idea which, if not very familiar in law, is of capital importance and is very well understood in commerce and finance.

However, in R (Factortame) v Secretary of State for Transport (No 3),[4] the European Court of Justice held that this was contrary to art 52 TEC, and the right to freedom of establishment.