Suez Crisis Frustrates C.I.F. Contract

AuthorO. C. Giles
Publication Date01 January 1959
DOIhttp://doi.org/10.1111/j.1468-2230.1959.tb00518.x
JAN.
1959
NOTES
OF
CASES
81
SUEZ
CRISIS
FRUSTRATES
C.I.F.
CONTRACT
CARAPANAYOTI
&
Co., LTD.
'u.
E.
T.
GREEN,
LTD.,' concerns a c.i.f.
contract affected by the blocking of the Suez Canal in November,
1956.
In September of that year, the plaintiffs bought from the
defendants
100
tons of Sudanese semi-decorticated expeller cotton
seed cake for shipment from Port Sudan in October
or
November
to Belfast, and the defendants made a covering purchase from
Sudan Oil Mills, Ltd., of Khartoum. The contract contained
a
clause concerning the effect of hostilities, but in the event the
court decided the case on the basis
of
the common law.
The arbitrators found that at the time when the contract was
made shipments from the Sudan to the United Kingdom were
routed through the Suez Canal, that the Canal was blocked-
obviously for some considerable time-well before the last date for
shipment, and that the sellers were unable to buy any cargo of
cotton seed cake required afloat
on
c.i.f. Belfast terms west of Suez
after the Canal had been closed. Sudan Oil Mills informed the
sellers that they could not ship the cargo sold under the covering
purchase. The sellers were accordingly unable to deliver the goods
to the buyers, and the latter sued for breach of contract.
The buyers argued that after the closing of the Canal the
customary route was round the Cape and that the sellers could
have shipped by that route; indeed, they were bound to do
so
since the customary route in respect of a c.i.f. contract was deter-
mined not at the time of the contract but at that of performance.
Moreover, counsel for the buyers argued,
a
contract for the sale of
unascertained goods can be frustrated only in very exceptional
circumstances, and there was in fact no decided case holding that
such
a
contract had been frustrated otherwise than by supervening
illegality.
McNair
J.
agreed that the material time for determining the
customary route is the time of performance. Mercantile customs
change rapidly, especially in times of international tension. In
this particular case, however, the route round the Cape had
certainly not become customary by the time shipment was due; it
was then only an emergency route. While it was true that contracts
for the sale of unascertained goods could rarely become frustrated,
and that the
25
per cent. increase of freight for the Cape route was
immaterial, since no one concluding a forward contract could refuse
performance because the contract had become unprofitable,
"
the
voyage via the Cape was more than two and a half times the length
of the voyage via the Canal and includes
.
. .
a circumstance which
may involve the seller in quite different obligations as to the con-
dition of the goods on shipment from that involved in shipment
via the Canal."
It
followed that it had become commercially
1
[1958]
3
W.L.R.
390; [1958] 3
Ail
E.R.
116.
VOL.
22
6

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT