## Facts

- Ocean Tramp Tankers Corp. time-chartered the *Eugenia* to V/O Sovfracht for a trip from the Black Sea to India under a Baltime form charterparty.
- During negotiations in late August–early September 1956, both parties discussed the risk that the Suez Canal might be closed but agreed to no express clause allocating that risk.
- The charterparty included a war-risks clause barring the vessel, without owners’ consent, from being ordered into areas dangerous due to actual or threatened hostilities.
- After loading at Odessa, the vessel proceeded toward Suez and arrived at Port Said on October 30, 1956, when hostilities made the area “dangerous” within the war clause.
- The charterers nonetheless ordered the vessel into the Suez Canal on October 31, 1956.
- The Canal was blocked by Egypt shortly thereafter, trapping the vessel; it later exited northward, reached Alexandria in January 1957, and ultimately arrived and discharged in India in April–May 1957.
- Charterers asserted the charterparty was frustrated by the Canal’s closure; owners denied frustration, treated the charterers’ position as repudiatory, and claimed hire and damages.
- An arbitrator found a breach of the war clause and no frustration; the High Court agreed on breach but held the contract frustrated; the owners appealed.

## Issues

1. Whether ordering the vessel into the Suez Canal during hostilities breached the charterparty war-risks clause.
2. Whether the Suez Canal closure was a supervening event that frustrated the charterparty by making performance radically different.
3. Whether frustration was unavailable because the alleged frustrating situation resulted from the charterers’ own decision and breach (self-induced frustration).

## Decision

- The Court of Appeal held the charterers breached the war-risks clause by ordering the vessel into a dangerous war zone without owners’ consent.
- The Court of Appeal held the charterparty was not frustrated by the Suez closure because performance remained commercially possible by an alternative route (around the Cape of Good Hope), even if slower or more expensive.
- The Court of Appeal held frustration was in any event unavailable because the predicament of being trapped in the Canal followed from the charterers’ own voluntary decision to proceed into Suez in breach of contract.
- Judgment was for the owners; the High Court’s finding of frustration was reversed, restoring the arbitrator’s conclusion.

## Legal Principles

- Frustration ends a contract only where a supervening event, not provided for by the contract, makes performance fundamentally or radically different; mere delay, inconvenience, or increased expense is insufficient.
- Where the contract allocates or addresses the relevant risk, the contract governs and frustration does not apply.
- A party cannot rely on frustration when the alleged frustrating event is self-induced, including where it flows from that party’s breach or deliberate risk-taking choice.
- Foreseeability of the event does not automatically bar frustration, but where the parties contemplated the risk and left the contract without a term addressing it, courts are less likely to treat the event as discharging the contract.

## Conclusion

The Court of Appeal held that Suez’s closure did not discharge the time charter because the voyage could still be performed by an alternative route and because the charterers could not invoke frustration where the vessel’s entrapment followed from their own breach in ordering entry into a war-risk zone.


Ocean Tramp Tankers Corp. v. V/O Sovfracht (The Eugenia), [1964] 2 Q.B. 226 (C.A. 1964)