## Facts

- Navios Corporation time-chartered three vessels from the respondent owners under separate but materially identical time charter parties.
- Each charter contained a war-cancellation clause allowing either party to cancel “upon completion of that particular voyage” if “war is declared against” specified NATO countries, including the United Kingdom and France.
- During the 1956 Suez Crisis, hostilities occurred between Egypt and the United Kingdom and France following the nationalization of the Suez Canal.
- On November 5, 1956, the owners invoked the war clause and canceled the charters.
- Navios filed three admiralty libels seeking damages for breach, alleging the cancellations were unauthorized because no qualifying “war” had been “declared against” a listed NATO country.
- The owners defended on the ground that the clause was triggered because Egypt had declared war against the United Kingdom and France.

## Issues

1. In a commercial time charter, does a clause permitting cancellation “if war is declared against” specified NATO countries require a declaration of war (as opposed to mere hostilities or a state of war)?
2. If a declaration is required, did Egypt’s statements and conduct during the Suez Crisis constitute a declaration of war against the United Kingdom and France sufficient to trigger the clause?

## Decision

- The court held the clause did not allow cancellation merely because a named NATO country was engaged in war or because hostilities existed; it required that war be “declared against” one or more listed NATO countries.
- Interpreting the clause as U.S. shipping businesspeople would understand it, and in light of its risk-allocation purpose, the court concluded that a declaration need not follow a single rigid formula.
- The court found Egypt did declare war against the United Kingdom and France, both in ordinary usage and in international-law terms, through explicit announcements and related acts treating relations as war.
- Because the contractual condition occurred, the owners’ cancellations under the war clause were effective; Navios could not recover for breach.

## Legal Principles

- A charter-party clause authorizing cancellation “if war is declared against” identified states is not triggered by hostilities alone; it requires a declaration of war against those states.
- Even where contractual language uses terms associated with public international law, interpretation remains commercial: the meaning is informed by how reasonable participants in the relevant trade would understand the words, considering the clause’s purpose.
- A “declaration of war” may be made by formal proclamation or by acts and public statements that clearly manifest an intention to treat relations as war; no particular diplomatic form is required.

## Conclusion

The court rejected a purely effects-based reading of the war clause and required a declaration of war against a listed NATO country; it nevertheless held that Egypt’s conduct and pronouncements during the Suez Crisis amounted to such a declaration against the United Kingdom and France, making the owners’ cancellations lawful and defeating the charterer’s breach claims.


Navios Corp. v. The Ulysses II, 161 F. Supp. 932 (D. Md. 1958)