Tsakiroglou & Company Ltd v Noblee Thorl, G.m.b.H.; sub nom Albert D Gaon & Company v Société, Interprofessionelle Des Oleagineux Fluides Alimentaires
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ORMEROD,LORD JUSTICE HARMAN |
| Judgment Date | 28 March 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J0328-1 |
| Date | 28 March 1960 |
| Court | Court of Appeal |
In the Matter of The Arbitration Act, 1950 and
In the Matter of An Arbitration
In the Matter If the Arbitration Act, 1950 and
In the Matter of An Arbitration
[1960] EWCA Civ J0328-1
Lord Justice Seller,
Lord Justice Ormerod and
Lord Justice Harman
In The Supreme Court of Judicature
Court of Appeal
MR EUSTACE ROSKILL, Q.C and MR R.A MACCRINDLE (instructed by Messrs Richards, Butler & Co.) appeared as Counsel on behalf the Appellants in both (Appellants).
MR JOHN MEGAW, Q.C. and MR J.F. DONALDSON (instructed by Messrs Bernard Samuel Berrick & Co) appeared as Counsel on behalf of the Respondent in the first appeal (Respondent).
SIR DAVID CAIRNS, Q.C. and MR S.O OLSON (instructed by Messrs Rowe & Maw) appeared as Counsel on behalf of the Respondent in the second appeal (Respondents).
LORD JUSTICE SELLERS: These two appeals were heard together by the consent of the parties as they relate to contract Sale of groundnuts in the shell for shipment cost, insurance, freight from post Sudan, which were unperformed at the time of the sellers, the Appellants in these failed to make shipment within the contract periods of the goods sold and claimed that they were no longer bound to do so. In respect of each contract the sellers had groundnuts available for shipment and had arranged reservations of shipment space to the respective destinations via the Suez Canal. These reservations were cancelled by the shipowners and the sellers made no other arrangements in fulfillment of these contract and they did not apparently attempt so to do. It was established in both the cases that shipment could have been made via the Cape of Good Hope although no doubt it would have involve a greater cost.
The main issue is whether the respective contract required the seller to ship the good via the alternative route of the Cape when the anticipated route via the Suez Canal was closed. This has been decided in favour of the Buyers in each case by the Umpire, and by the Board of Appeal of the incorporated oil seed Association and by Mr Justice Diplock in the Taskiroglou case and Mr Justice Ashworth in the Gaon case. In the former case Mr Justice Diplok felt that the matter was concluded by the finding of the Appeal Tribunal.
The parties in both cases contract on the terms of the I.O.S.A. contract No. 38 which is headed "contract for west African Groundnuts in the shell" taken and accepted to be modified or adapted to provide for shipment from part Sudan on the Sudanese cast. The shipment clause so adapted is to be read "shipment form part Sudan as per Bill or Bill of Lading dated or to be dated… by steamer or steamers (tankers excluded) direct or indirect with or without transshipment. For the purpose of the contract the words steamer or steamer are intended to involve and full powered primarily engine driven vessel" There is a clause requiring buyers to accept documents containing certain specified deviation clauses.
In the Taskiroglou case the contract dated the 4th October, 1956 was for shipment November/December 1956 of 300 Tones of Sudanese groundnuts in the shell at £ 50 per 1,000 Kilos c.i.f. Hamburg. In the Gaon case there were two contracts, the first date 12th October 1956 was for shipment October/November, 1956, of 1,500 metric ton. Sudan groundnuts in shall at E 49.10.0 per metric ton c.i.f. Nice. The second dated the 31st October, 1956 was for shipment November 1956 lf 1,000 tons similar groundnuts at £54. 5.0. per metric ton c.i.f. Marseilles.
The diary of the events affecting the Suez Canal set out in both case but it sufficient to state here that the Suez in canal was effectively blocked on the 2nd November, 1956 and remained closed to shipment until the 9tth April, 1957.
There is no doubt that when contract of the 4 October and the 12th October 1956 were entered into that the usual And normal route for the shipment of Sudanese groundnuts from port Sudan to either Hamburg, Nice or Marseilles was via the Suez canal After the closing of the canal the shortest and a practicable route to these ports was via the cape of good Hope. The sea route via Suez to Hamburg is approximately 4 386 miles and via the cape 11,137 miles and to nice and Marseilles the comparative distance are approximately 2,300 miles and 10,500 miles respectively.
From the 10th November, 1956 a 25 per cent freight surcharge was placed on good shipped on vessels proceeding via Cape of Good Hope and this was increased to 100 per cent on the 13th December, 1956.
The effect of the blocking of the Suez Canal on shipowners was obvious, for the relatively short route the canal was denied them and for destinations such as we are considering in these case a different and much more prolonged journey had to be substituted. But the question is what effect that had on the contract of sale between the parties here.
The seller contended that the contract in each case should be read as if it contained the provision "shipment from port Sudar via the Suez Canal". Further Messrs Taskiroglou had sought an alerting that they were prevented from making the shipment by war or force majeure. The Buyer refused. Clause 6 is as follows: "In the case of prohibition of import or export, blockade or war epidemic or strike, and in all case of force majeure preventing the shipment within the time fixed or the delivery, the Period allowed for shipment of delivery shall be extended by not exceeding two months. After that, if the case of force Majeure be still operating the contract shall be cancelled". The comparable clause in the Gaon contract was clause 8 and it was similarly relied on. These two questions can conveniently be considered together.
It was submitted that although the contract of sale did not state the route by which the goods were to travel, it was in the circumstances to be implied that they would be shipped by the Suez Canal which was the usual and normal route and route in the contemplation of the parties at the making of the contract. Shipment too, it was said meant the intended shipment, the one for which they had contracted and made provision and as that was not available by circumstances beyond their control the extension ought to have been granted.
If the Sellers had stipulated expressly for shipment via Suez in these contracts they would no doubt have been on strong ground in the events which arose, but they did not so stipulate, and I can see no adequate ground on which to imply into the contracts any such term or requirement. The sales were for future shipments and the circumstances at the time of shipment would be more important to the parties than at the time of the making of the contract. It is true that the cost of the freight was included in the price. This is a risk which falls on the seller under such a contract and whilst he may have to pay more freight than he contemplates at the time of contracting, unless he has made a firm engagement of freight before he makes his sale, he may on the other hand find that he has to pay less.
In Carapanayoti & Co. Ltd. v. E.T. Green Ltd., 1959, I Queen's Bench, page 131, which was the first of what Counsel described as the "Suez" cases to come before the Courts, Mr Justice McNair held that where a contract provides that the performance, or a particular part of the performance, is to be carried out in a customary manner, the performance must be carried out in a manner which is customary at the time when the performance is called for. I agree with Mr Justice McNair's opinion and the reasoning by which he supported it that the obligation of the sellers is not confined to shipping by a route usual and normal at the/time of the contract.
Mr Roskill relied on the judgments in In re Sutro & Co. v. Heilbut Symons & Co., 1917, 2 King's Bench, page 318, and especial the dissenting judgment of Lord Justice Scrutton, to support his argument on the term to be implied into the contract, but the point which arises here was not under consideration. In that case the sea route and the overland route were both in use at the time of the contract and at the time of its performance. I do not think one can deduce any real support from the case for the argument. There has been unanimity amongst the Judges who have considered this submission and I am in full agreement with their views in rejecting it.
Although there were hostilities in Egypt and in the region of the Suez Canal at the material times, there has been no finding of war, and I think it is clear that neither war nor force Majeure prevented shipment of the contract goods. Shipment means physically putting the goods on board a vessel, and, if there was a duty on the Sellers to put the contractual goods on board a vessel for a voyage round the Cape to the contractual destination, there was nothing to prevent them doing so and clause 6 does not protect them.
There is no finding that after the Suez route was closed and at any time for shipment under these contracts there way any norms' route for shipping from Port Sudan to the ports concerned. The Cape route, the Appellants said, was and remained an emergency route. The Appellants therefore relied on the statement on page 39 of "C.I.F. Contracts" in the last edition by Judge Kennedy: "In the absence of express terms in the contract the customary or usual route must be followed. A usual route need not be the invariable route. In one case a route followed in one half of the recorded cases was held to be a usual or customary route" — and it was that as there was no usual or customary route the contract could not be performed by the sellers.
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