## Facts

- A Sudanese merchant seller agreed by written contract (Oct. 4, 1956) to sell Sudanese groundnuts to a German buyer on CIF Hamburg terms, for shipment in November/December 1956.
- The contract contained a force majeure clause allowing up to a two-month extension, after which the contract would be cancelled if performance remained impossible.
- The contract did not specify a shipping route; at contracting, the usual route to Hamburg was via the Suez Canal.
- On Nov. 2, 1956, the Suez Canal was closed due to the Suez crisis.
- Shipment around the Cape of Good Hope remained possible but was much longer and would substantially increase freight costs (about a doubling).
- The seller did not ship the goods via the Cape route.
- In arbitration, the umpire found the seller in default and awarded damages to the buyer; a Board of Appeal upheld the award, finding Cape shipment not “commercially or fundamentally different” from Suez shipment.
- The High Court and Court of Appeal upheld the arbitral decision; the seller appealed to the House of Lords.

## Issues

1. Whether a term should be implied that shipment had to be via the Suez Canal, or via the route usual at the contract date.
2. Whether, under a CIF contract, the seller was required to ship by another reasonable and practicable route when the usual route became unavailable.
3. Whether the closure of Suez frustrated the contract by making performance “radically different” due to added cost and delay.
4. Whether the seller could rely on the contract’s force majeure clause to excuse the failure to ship.

## Decision

- The House of Lords dismissed the appeal and upheld the damages award for non-shipment.
- No term was implied restricting shipment to Suez (or to the route usual at the contract date).
- The seller remained obliged to ship to Hamburg by a reasonable and practicable alternative route; the Cape route qualified despite increased expense and transit time.
- The contract was not frustrated because performance by the Cape route was not commercially or fundamentally different from performance via Suez.
- The force majeure clause did not excuse a complete failure to ship where shipment by an alternative reasonable route remained available.

## Legal Principles

- Frustration requires an event that makes performance radically different from what the contract contemplated; increased cost and delay, without more, are generally insufficient.
- In a CIF sale, when the contemplated usual route becomes unavailable, the seller must perform by using a reasonable and practicable alternative route if one exists.
- Courts will not readily imply route-specific terms into shipping contracts absent necessity to make the agreement work or clear shared intention.
- Force majeure clauses are construed by their language and commercial function; they do not ordinarily excuse non-performance where a viable alternative method of performance exists.
- Where arbitral findings include an evaluative conclusion that substitute performance is not commercially or fundamentally different, appellate review generally proceeds on the facts as found, asking only whether the legal test for frustration is met.

## Conclusion

The House of Lords held that closure of the Suez Canal did not discharge a CIF seller from its obligation to ship where an alternative reasonable route existed, and that markedly higher freight costs and longer transit time did not amount to frustration or trigger the force majeure clause to excuse non-shipment.


Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH, [1962] A.C. 93 (H.L.)