Trade & Transport Inc v Iino Kaiun Kaisha Ltd, The Angelia [1973] 1 W.L.R.

210
Z, purchaser from C a quantity of phosphate fob Eilat.
R charterers, as principals & at Z's request chartered vessel Angelia, for a voyage from Eilat on terms
that the cargo was to be supplied at an average rate of 1,000 tons per weather working day.
C was unable to arrange to have the large quantities of rock transported to Eilat to be loaded onto
Angelia on the estimated date of arrival given by the ship owners.
R knew that delays were likely but did not discuss the time factor with Z or C.
R informed the owners that there would be a delay & the owners accepted this as cancellation of the
charter, & claimed damages for wrongful repudiation.
The arbitrator stated a special case for the opinion of the court.
Held, (1) that the delay which would be caused by the unavailability of transport for the cargo to Eilat
was not sufficient to frustrate the charterparty, & the owners were not entitled to treat the charter
as at an end;
(2) that the charterers were not protected by cl.2 of the "Fosfo" charterparty form [PHOSPHATE
CHARTER-PARTY AGREEMENT];
"Shortage of cars, wagons" covered the unavailability of lorries; the transport company's failure to
provide lorries was unavoidable by R. But R or C should have enquired about transport before the
charterparty was entered into, so that the delay was not due to "unavoidable hindrance" or to "any
other causes or hindrances happening without the fault of the charterers";
(3) that even if C were protected by cl.2 the doctrine of fundamental breach could not be invoked
to circumvent it in the case of anticipatory breach; failure to load cargo because of "unavoidable
hindrance" could never be a fundamental breach. There is no fundamental breach if the breach
occurs due to circumstances beyond a party's control & the contract provides that non-performance
due to such circumstances is to be excused.
Judge: Kerr, J.

Gyllenhammar & Partners International Ltd v Sour B Industrija [1989] 2 Lloyd's Rep. 403
D agreed to build a vessel for P.
The contract provided that the contract;
"was subject to" certain conditions, including D obtaining a Letter of Guarantee & certain permissions
& approvals & P paying 1st instalment of the price. If these were not forthcoming the contract
provided that it would unless mutually agreed "become null & void".
D contended that as P had not put in a bank draft by the due date, the contract was null & void.
P claimed specific performance or damages in lieu, arguing that D's failure to meet certain conditions
debarred them from relying upon P's failure.
D contended that on a proper construction of the contract it had become null & void.
QBD Held, that none of the preconditions to the contract had been satisfied & D were entitled to
treat it as null & void.

Channel Island & Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd's Rep. 145
In 1986 discussions took place bet C.I.F. & Sealink, the purpose being to replace the two operations
with one single combined profitable operation to be run by a new co in which C.I.F. & Sealink would
have an equal interest. The negotiations culminated in the signing of Heads of Agreement dated July
16, 1986 & the Joint Venture Agreement was signed on Sept. 30, 1986. The title of the new company
as finally established was B.C.I.F.
The JVA provided inter alia that C.I.F. should make available on charter to B.C.I.F. one named
vessel, Corbiere , & that
Sealink should similarly make available to B.C.I.F. two named vessels, Earl Granville & Earl
Harold .
The charters of these three vessels were to be on bare-boat charter to *324 enable B.C.I.F. to crew
the vessels offshore using a separate management company.
By a last minute amendment it was provided that if for any reason beyond the control of Sealink
either Earl Granville or Earl Harold could not be made available on bareboat charter Sealink should
make available a substitute vessel or vessels.
The agreement was signed by both parties on Sept. 30 & on the same day Sealink held a meeting with
leaders of the various trade unions to inform them of the JVA.
The crews of a number of Sealink vessels, including Earl Granville & Earl Harold , took
industrial action including sit-ins. This resulted shortly thereafter in a national strike.
About two weeks or so later the strike was officially settled by comprehensive agreements with the
trade unions. The agreement with NUMAST embargoed bareboat charters & offshore conditions of
service.
B.C.I.F. in the meanwhile operated a restricted service with Corbiere which C.I.F. made available on
bareboat charter.
Disputes arose between the parties as to the terms on which Sealink's two vessels &/or any substitutes
were to be made available.
C.I.F. rejected Sealink's proposals to offer first Earl Granville & Earl Harold & then two substitute
vessels not on bareboat charter but on time charter in line with the overall agreements reached with
the unions.
The issues for decision were (1) did the JVA permit time chartering? (2) on the assumption that
Sealink's tender of time chartered substitute vessels was in breach of the agreement were they
absolved by the terms of the force majeure clause which provided that a party shall not be liable for
non-fulfillment of any obligation arising under the agreement by reason inter alia of strikes & any
accident or incident of any nature beyond the control of the relevant party? & (3) were C.I.F. in breach
of a term in the agreement in effect prohibiting either party from operating competing ferry services,
by running through an associated company a cargo vessel called Lautonia carrying freight between
the U.K. & the Channel Isl&s after Oct. 1, 1986?
Held, by Q.B. (Com. Ct.) (Hirst , J.), that
(1) in order to establish a force majeure situation it was incumbent on Sealink to prove that the non-
fulfillment of the obligation to bareboat charter the two first choice vessels was due to circumstances
beyond Sealink's control & that there were no reasonable steps they could have taken to avoid or
mitigate the strike or its consequences;
(2) the settlement agreements with the unions were a completely new causative event & the event in
fact relied upon by the Sealink board at the board meeting on Oct. 21 as disabling Sealink from
performance of their bareboat charter obligations; the entry by Sealink into the unions' agreements
was a genuine choice by Sealink & Sealink had failed to show that their failure to fulfil their
obligations to bareboat charter was beyond their control;
(3) on the evidence Sealink failed to establish that they took reasonable steps to avoid or mitigate
the strike & its consequences & were not entitled to rely on the force majeure clause;
(4) the purpose of the transaction was to stop the losses which the separate Channel Isl& services
were incurring & to replace the services with one combined profitable enterprise & a vital feature of
that aim was to secure lower manning ratios & more economical conditions of service for which
bareboat chartering & offshore manning were essential elements; if the parties had intended the
substitute vessels to be chartered on different terms from the first choice vessels they would have so
stipulated;
(5) C.I.F. had made it clear that they were not prepared to accept time charters either for the first-
choice vessels or for the substituted vessels & Sealink had accepted that position;
(6) on the evidence the Lautonia operation did not constitute a breach of the agreement;
(7) there would be judgment for C.I.F.
The defendants appealed, the issue being whether or not the defendants (Sealink) were protected by
the force majeure clause.
Held, by C.A. (Parker & Ralph Gibson , L.JJ. & Caulfield , J.), that Sealink had failed to demonstrate
any error in the reasoning of the learned Judge or in the assessment of the evidence; there was no
evidence by inference or otherwise that had Sealink found alternative vessels & tendered them on
bareboat charter they would have been unable in effect to do so; the defendants had wholly failed
to make out a case that the force majeure clause was applicable on the facts; the appeal would be
dismissed (see p. 327, col. 2 ; p. 328, cols. 1 & 2 ; p. 329, col. 2 ).
UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS
VIENNA, 2010 [CISG] – operation on Jan 1st, 1988. Founded on the Hague Unigorm Laws, Vienna
Conv differs in form & in some respects in substance.
Parties has to ‘contract out’.
Section IV Exemptions
ARTICLE 79
1. A party is not liable for a failure to perform any of his obligations if he proves that the failure was
due to an impediment beyond his control and that he could not reasonably be expected to have
taken the impediment into account at the time of the conclusion of the contract or to have avoided
or overcome it or its consequences.
2. If the party’s failure is due to the failure by a third person whom he has engaged to perform the
whole or a part of the contract, that party is exempt from liability only if:
(a) he is exempt under the preceding paragraph; and
(b) the person whom he has so engaged would be so exempt if the provisions of that paragraph
were applied to him.
3. The exemption provided by this Article has effect for the period during which the impediment
exists.
4. The party who fails to perform must give notice to the other party of the impediment and its effect
on his ability to perform. if the notice is not received by the other party within a reasonable time
after the party who fails to perform knew or ought to have known of the impediment, he is liable
for damages resulting from such non-receipt.
5. Nothing in this Article prevents either party from exercising any right other than to claim damages
under this Convention.

Uniform Commercial Code (UCC)

§ 2-615. Excuse by Failure of Presupposed Conditions.

Except so far as a seller may have assumed a greater obligation and subject to the
preceding section on substituted performance:

• (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with
paragraphs (b) and (c) is not a breach of his duty under a contract for sale if
performance as agreed has been made impracticable by the occurrence of a
contingency the non-occurrence of which was a basic assumption on which
the contract was made or by compliance in good faithwith any applicable foreign or
domestic governmental regulation or order whether or not it later proves to be
invalid.
• (b) Where the causes mentioned in paragraph (a) affect only a part of
the seller's capacity to perform, he must allocate production and deliveries among
his customers but may at his option include regular customers not then
under contractas well as his own requirements for further manufacture. He may so
allocate in any manner which is fair and reasonable.
• (c) The seller must notify the buyer seasonably that there will be delay or non-
delivery and, when allocation is required under paragraph (b), of the estimated
quota thus made available for the buyer.

ICC Hardship Clause 2003

This clause, known as the “ICC Hardship Clause 2003”, is intended to apply to any contract
which incorporates it either expressly or by reference. While parties are encouraged to
incorporate the clause into their contracts by its full name, it is anticipated that any reference
in a contract to the “ICC Hardship Clause” shall, in the absence of evidence to the contrary,
be deemed to be a reference to this clause.

1. A party to a contract is bound to perform its contractual duties even if events have
rendered performance more onerous than could reasonably have been anticipated
at the time of the conclusion of the contract.
2. Notwithstanding paragraph 1 of this Clause, where a party to a contract proves that:
a. the continued performance of its contractual duties has become excessively
onerous due to an event beyond its reasonable control which it could not
reasonably have been expected to have taken into account at the time of the
conclusion of the contract; and that
b. it could not reasonably have avoided or overcome the event or its
consequences,the parties are bound, within a reasonable time of the
invocation of this Clause, to negotiate alternative contractual terms which
reasonably allow for the consequences of the event.
3. Where paragraph 2 of this Clause applies, but where alternative contractual terms
which reasonably allow for the consequences of the event are not agreed by the other
party to the contract as provided in that paragraph, the party invoking this Clause is
entitled to termination of the contract.

UNIFORM LAWS ON INTERNATIONAL SALES ACT 1967 [The Hague on 1st July 1964]
Only applicable to Conts of Inter Sale. Parties needed to ‘contract in’.
Chap. V of Part III – Exemptions Arts. 74-77, 79 & 80.
ARTICLE 74
1. where one of the parties has not performed one of his obligations, he shall not be liable for such
non-performance if he can prove that it was due to circumstances which according to the intention
of the parties at the time of the conclusion of the contract, he was not bound to take into account
or to avoid or to overcome; in the absence of any expression of the intention of the parties, regard
shall be had to what reasonable persons in the same situation would have intended.
2. Where the circumstances which gave rise to the non-performance of the obligation constituted only a
temporary impediment to performance, the party in default shall nevertheless be permanently relieved of his
obligation if, by reason of the delay, performance would be so radically changed as to amount to the
performance of an obligation quite different from that contemplated by the contract.

3. The relief provided by this Article for one of the parties shall not include the avoidance of the contract under
some other provision of the present Law or deprive the other party of any right which he has under the present
Law to reduce the price, unless the circumstances which entitled the first party to relief were caused by the act
of the other party or of some person for whose conduct he was responsible.

Lebeaupin v Crispin & Co [1920] 2 K.B. 714

By each of two contracts, each dated May 16, 1917, C. & Co. sold to L. 2500 cases of “British
Columbia Fraser river salmon.”
The first contract had the words, “The salmon to be the first 2500 cases of ½ lb. flat pinks
packed by the St. Mungo Cannery, Fraser river, during the season of 1917.”
The second contract had a similar clause, except that the packing was to be by the Acme
Cannery.
Each contract had this exception clause: “In the event of the destruction, or partial
destruction, of the cannery, plant, or material, or the packing being interfered with, or
stopped, or falling short through short run of fish, or through strikes or lock-out of fishermen
or workmen, or from any cause not under the control of the canners or shippers …. causing
non-arrival at destination, the contract to be cancelled in respect of such non-delivery or part
non-delivery as the case may be;” also the words in large letters, “Subject to force majeure.”
In the 1917 seas, on there was an excellent run of fish on the Fraser river. The St. Mungo
Co. began to pack the salmon in the ½ lb. tins, but finding that the tins were defective
they ceased packing, and before they got a fresh supply of ½ lb. tins the run of salmon
had practically ceased.
If they had possessed a sufficient supply of good tins they could have secured fish for 2500
cases of ½ lb. flat pinks. The Acme Co. had a full supply of ½ lb. tins, but as they also had
a large number of 1 lb. tins which were getting rusty when the fish began to run, they filled
them-first, and before they could proceed to fill the ½ lb. tins the run of fish had ceased. The
cessation of the run was in no way abnormal. No deliveries having been made under the
contracts, the buyer claimed damages, and the umpire awarded him 12,500 dollars, to be
paid in London at the rate of exchange ruling at the date of the award — namely, February
24, 1920—
Held:
(1.) that there was no failure of the subject-matter of the contracts within the principle
of Howell v. Coupland (1874) L. R. 9 Q. B. 462; (1876) 1 Q. B. D. 258 so as to free the
sellers from liability;
(2.) that the general exception clause did not protect the sellers;
(3.) that there was no force majeure which prevented the fulfilment of the contracts; and
(4) that the damages, assessed at 12,500 dollars, were payable in London at the rate of
exchange ruling upon the date of the breach of contract — namely, September 30, 1917 —
and not at the rate ruling at the date of the award.
A force majeure clause should be construed in each case with a close attention to the words
which precede or follow it, and with a due regard to the nature and general terms of the
contract. The effect of the clause may vary with each instrument.

Joseph Pyke & Son (Liverpool) Ltd v Richard Cornelius & Co [1955] 2 Lloyd's Rep. 747;
CIF contract S, Joseph had contracted to sell B, Richard 1,000 tons of Argentine maize; the contract
contained a prohibition of export clause.
Before the chartered ship was loaded the Argentine Government prohibited the export of maize.
On arbitration the arbitrator found against the sellers, holding that they had failed to prove that the
fulfilment of the contract was rendered impossible by the Argentine decree.
Sellers, J. held that the finding by the arbitrator was a finding of fact, so that the award could not be
disturbed.

Walton (Grain & Shipping) v British Italian Trade Co [1959] I Lloyd's Rep. 223
Ss were obliged under a CIF contract to deliver a cargo of groundnut oil. There was a fm cl in the
contract,
"Should the shipment be delayed ... by any executive or legislative act ... time of shipment to be
extended by two months. Should shipment not be possible within these two months, contract to be
void".
Subsequent to the cont, the Indian govt issued an edict refusing to grant any export licence for
groundnut oil.
Bs sued for delivery and/or damages for nondelivery.
Ss attempted to rely on the fm cl and argued that there exists an implied term in the contract that
shipment is subject to licence.
Bs on the other hand contended that under a CIF contract, it was the duty of Ss to secure the export
licence. That duty was an ordinary commercial risk. The fm cl could only apply where the event is
"something of the kind not in the knowledge of the parties at the time of the contract and which
occurs after making the contract".
There was no supervening illegality since it was illegal to export without an export licence in the first
place, and this was known to the parties at the time of the contract. All that happened was that the Ss'
expectations were not fulfilled. There was thus no force majeure.
Held:
Judgment in favour of the Ss. Construing the force majeure clause, it is clear that the facts fell
squarely within the parameters of the clause. There is an implied condition in every contract that
at the time of performance, it should be legal for the promisor to carry out his contractual
obligations. The contract is therefore accordingly discharged when the sellers attempted but could
not secure the export licence.
As for the definition of "supervening", a common sense approach should be adopted. The buyers'
contention that force majeure did not arise because there was a pre-existing illegality on shipment
without licence could not be accepted.

Pool Shipping v London Coal Co of Gibraltar [1939] 2 All E.R. 432:

Contract—Suspension of performance— "Normal working"—Std form of contract entered into by
defendants to supply at Gibraltar "to all the steamers of which the [plaintiffs] are for the time being
registered owners or managing owners . . . such quantities of [Welsh or Durham coal] as are normally
required & taken by such steamers coaling en route in the customary manner"—
"In the event of any cause or circumstance beyond the control of the [defendants] &/or suppliers of
whatsover description & wheresoever occurring . . . which prevents the supply, shipment, carriage or
delivery of [contract coal] or the normal working of this contract, [defendants] or suppliers shall be
entitled to relief from all obligations under this contract during the continuance of any such causes or
circumstances or the effects thereof . . ."
—Contract in force from Jan. 9 to Dec. 31, 1937 — Intimation given by Ds to Ps in May that owing
to the abnormal position of both the coal & shipping trades it would be impossible to keep the
bunkering depots sufficiently supplied with contract coal; that the contract was suspended by
virtue of the exception clause; but that they (the defendants) would be willing to supply each vessel
as to one-third of her requirements with emergency coal at the current price of the day—
Protest by Ps — Notice given by P in September that one of their steamers would call at Gibraltar for
200 tons of Welsh coal under the contract—Vessel supplied with one-third emergency coal & debited
with extra cost—Account signed by master "subject to my owners' approval" — Claim by plaintiffs
to recover extra amount paid —Whether events happened beyond the control of Ds which affected
the "normal working" of the contract—Evidence that from February to May, 1937, difficult
conditions arose regarding supplies of bunker coal, & that the defendants bought cargoes of
Westphalian coal in an endeavour to remedy the deficiency in their supplies —Whether normal
conditions had returned by September, when plaintiffs' order was given—Construction of contract.
Held, that the defendants adopted a normal method in carrying out the contract; that the normal
working of the contract was prevented between March & June by the abnormal demand for coal; that
the defendants' purchase of Westphalian coal was a reasonable endeavour on their part to
remedy the deficiency in their supplies; that the effects of the circumstances which had arisen were
still operating in September, when the plaintiffs' order was given; & that therefore the contract was
still suspended—Judgment for defendants.

Intertradex SA v Lesieur Tourteaux SARL [1978] 2 Lloyd's Rep. 509:

In August 1972 V sold to P 800 tonnes of groundnut expellers c.i.f. Rouen, shipment March 1973, on
the conditions of GAFTA 100, cl. 22 of which provided, inter alia, "Force majeure, strikes, etc.--
[V] shall not be responsible for delay in shipment of the goods or any part thereof occasioned by any
breakdown of machinery or any cause comprehended in the term 'force majeure.' If delay in shipment
is likely to occur for any of the above reasons, shipper shall give notice to [P]. . . .
The notice shall state the reason(s) for the anticipated delay. If after giving such notice an extension
to the shipping period is required, then shipper shall give further notice not later than two business
days after the last day of the contract period of shipment stating the port or ports of loading from
which the goods were intended to be shipped. . . . If shipment be delayed for more than one calendar
month, [P] shall have the option of cancelling the delayed portion of the contract. . . ."

V intended to fulfil the contracts by appropriations under an f.o.b. contract for 1,000 tonnes of
groundnut expellers between themselves & S, the sole producers.
On February 6, 1973, S notified V of a machinery breakdown at their manufacturing plant, whereupon
V notified P of the breakdown & invoked force majeure under cl. 22.
On March 27, S advised V that loading would be about May 15.
On March 28, V telexed P requesting an extension of the shipment date & declaring Dakar &/or
Abidjan as ports of shipment.
P did not exercise any option to cancel the contracts. In consequence of the breakdown & due to
delays in the supply by rail of raw materials to the factory, S were only able to deliver 511 tonnes to
V for shipment & V appropriated this to another contract with P dated February 6, 1973.
On May 23, P informed V that unless they were told within 24 hours the date on which V intended
to ship the goods they would consider V in default & claim arbitration.
V rejected the notice as uncontractual, maintaining that the position was one of force majeure.
On a special case stated, CA held, on appeal, (1) the events which had occurred were commonplace
in the world of affairs & accordingly the contracts had not been frustrated;
(2) if breakdown of machinery was of itself sufficient to prevent shipment by the end of May, V were
protected by cl. 22; but if shortage of raw materials was also effective, there were two causes, & to
be protected V should have given another notice stating the additional reason;
(3) accordingly the matter would be remitted to the GAFTA Board of Appeal for a further finding;
(4) should V be found liable on the remission, the measure of damages would be the difference
between the contract price & the value of the goods if the documents had been tendered on the last
date for appropriation under the extended shipment period, i.e. June 14, 1973.

J Lauritzen AS v Wijsmuller BV (The Super Servant II) [1990] 1 Lloyd's Rep. 1

D agreed to transport Ps' drilling rig from Japan to Rotterdam, using a "transportation unit", which
was described as Super Servant One or Super Servant Two.
D could replace the unit by other means of transport, & could cancel the contract on the grounds of
force majeure or any other circumstances which reasonably prevented the performance of the
contract.
There was also a duty of care clause in favour of P.
The Super Servant Two sank before performance of the contract & D informed P that they would not
carry out the transportation with Super Servant One (as it was engaged on another contract).
The rig was transported under a later "without prejudice" agreement between the parties by barge &
tug.
P claimed damages for breach of the contract of carriage. D pleaded that the contract had been
frustrated. They counterclaimed in respect of increased expenses. Hobhouse J. ruled that D were not
entitled to cancel the contract on the grounds of frustration.
CA Held, dismissing Ds' appeal, that
(1) D owed no contractual duty to P in relation to events occurring before the contract of carriage
began;
(2) on the construction of the contract, D were not entitled to cancel the contract if the loss of the
vessel was caused by the negligence of D, their servants or agents before the time for performance
had arrived &
(3) the contract provided for the use of another vessel, & so the sinking of the Super Servant
Two did not frustrate the contract.
Judge: Dillon, L.J.; Bingham, L.J.

Nord Naphtha Ltd v New Stream Trading AG [2020] 11 WLUK 281

The C applied for summary judgment on its claim for repayment of an advance paid to
the D for a delivery of diesel.
D had agreed to deliver 30,000 tons of ultra low sulphur diesel to C on 21 April 2019.
Cont bet the parties provided that C was to make an advance payment of 90% of the value
of the goods.
The refinery that was to supply the seller with the diesel was to provide a letter of comfort.
The contract provided that the time for delivery was to be extended if a force majeure event
occurred, and if the delay was more than 30 consecutive days either party could terminate
the contract.
Cl 14.5 provided that subject to any agreement between the parties in relation to deliveries
after termination by a force majeure event, nothing "shall impair the obligations by the seller
to repay to the buyer the amount of the advance payment".
C made an advance payment of US$ 16 million by the required date. The refinery comfort
letter provided that if the total value of product delivered was less than the advance payment,
the refinery would repay the difference. Liability under the comfort letter was to expire on 25
April 2019, and it could be revoked by the refinery at its sole discretion.
D informed C that delivery was going to be delayed because of a force majeure event. The
delay exceeded more than 30 consecutive days and C served notice to terminate the
contract & sought repayment of the advance payment.
D argued that there was no obligation under the contract to make repayment.

QBD Held Application granted.

Given the terms of the contract and the expiry date of the comfort letter, if there was
a force majeure event it was highly likely that a claim for repayment would not be
covered by the comfort letter.
Further, the comfort letter could be revoked at the sole discretion of the refinery if
a force majeure event occurred. Therefore the rights and liabilities under the contract
would not be affected by the comfort letter. The starting point for considering the terms
of the contract had to be that it would be an extremely surprising result if, without any express
provision, the C was not able to recover the advance. It was only possible to make sense of
clause 14.5 by reading it as an express obligation to repay the advance in the event of
termination after a force majeure event, Totsa Total Oil Trading SA v New Stream Trading
AG [2020] EWHC 855 (Comm), [2020] 3 WLUK 387 considered. Even if that was not the
case, the requirements for implying a term to that effect had been satisfied.

Classic Maritime Inc v Limbungan Makmur SDN BHD and another [2019] Bus. L.R.
2854; [2019] EWCA Civ 1102

Under a contract of affreightment between the shipowner and the charterer, the charterer
agreed to supply and load 59 shipments of iron ore pellets. The charterer failed to
provide cargoes for 7 shipments of iron ore pellets.
5 of those instances occurred after a major dam burst which shut production at the
relevant mine.
The charterer's obligation to supply the cargoes was absolute, subject only to cl 32 of the
contract of affreightment, which, under the heading “exceptions”, stated that the charterer
was not responsible for any failure to deliver the cargo resulting from accidents at the mine,
providing the event directly affected its performance under the contract.
The shipowner did not accept that the charterer was entitled to rely on clause 32 in relation
to the five shipments that should have taken place after the dam burst, and claimed damages
for breach of contract.
Judge held that (1) there was a distinction between a contractual frustration clause and an
exceptions clause, the latter requiring satisfaction of the “but for” test, (2) it was doubtful
whether the charterer would have performed the contract in accordance with its terms “but
for” the dam burst, and (3) accordingly, the charterer was not excused from liability under
clause 32.
On the issue of damages, the judge made an assessment by comparing the position the
shipowner was actually in with the position it would have been in had the charterer been
able and willing to supply and ship the cargoes. Since, due to the dam burst, no cargoes
would in fact have been shipped, the judge held it would be contrary to the compensatory
principle to award the shipowner anything other than nominal damages.
On the charterer's cross-appeal and the shipowner's appeal—
CA Held , dismissing the cross-appeal, that in deciding whether the charterer could rely on
clause 32 in circumstances where it would not have performed its obligation anyway, what
mattered was the language of the clause, and not whether it was labelled a
contractual frustration clause, a force majeure clause or an exceptions clause; that
one particularly important feature of clause 32 was the use of the *2855 words “resulting
from”, together with the requirement that the events in question “directly affect the
performance of either party”;
that the combined effect of those phrases imported a more demanding causation
requirement than that the event rendered performance impossible; that construed in the
light of that and other features, clause 32 did not protect the charterer from liability for
breach of duty, in circumstances where, even if the accident had not occurred, it
would not have been ready and willing to provide cargoes for shipment (post, paras
32–33, 45, 48, 62, 90, 91, 92, 94, 95).
Bremer Handelsgesellschaft GmbH v Vanden-Avenne Izegem PV BA [1978] 2 Lloyd's Rep
109 , HL(E) distinguished.
(2) Allowing the appeal, that although in
cases of anticipatory breach, it might be appropriate to take into account a party's
willingness to perform and whether, even if willing, it would nevertheless have been
excused from performance by later events, in
cases of an actual breach of an absolute obligation, such as the present case, the
reason for failure to perform or subsequent impossibility was irrelevant to the
assessment of damages;
that rather than comparing the shipowner's actual position with its position had the
charterer been willing to perform the contract, the comparison which application of the
compensatory principle required was between the freights which the shipowner would
have earned less the cost of earning them, and the actual position in which the
shipowner found itself as a result of the breach; that that comparison resulted in a
damages award of over US$19m; and that, accordingly, the judge had erred in his
application of the compensatory principle when holding that the shipowner was only
entitled to nominal damages (post, paras 81–84, 89, 90, 91, 95).
Golden Strait Corpn v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 AC
353 , HL(E) and Bunge SA v Nidera BV [2015] Bus LR 987 , SC(E) distinguished.
Decision of Teare J [2018] EWHC 2389 (Comm); [2018] Bus LR 2471 reversed in part.

General Construction Ltd v Chue Wing & Co Ltd [2013] UKPC 30

The appellant (G) appealed against a decision of the Supreme Court of Mauritius that it was
liable to the respondents (X and C) for the damage caused by a crane which fell during a
cyclone.
In 1994, the upper sections of a crane, which was owned, erected and operated by G for
works being undertaken on a multi-storey building, fell onto the neighbouring building of
which X was the owner and landlord and C was the business tenant.
The crane had been bought second-hand by G and brought to Mauritius from France in
1985.
The cyclone developed over a few days and G's evidence was that it was too late to
dismantle the crane by the time the cyclone was a real possibility.
G was held liable on the basis that, although there was no proof of fault within the Civil
Code art.1382, it had not established that the accident occurred due to force majeure
within art.1384. The trial judge found that the cyclone was not unforeseeable and did not
constitute an event of force majeure.
The Supreme Court upheld that finding and found that G should have assessed the crane's
safety in cyclones well ahead of the cyclone in question. It held that G's employee had failed
to give evidence as to the crane's suitability in a cyclone and that the cyclone in question
did not have exceptional characteristics to qualify as a force majeure.
G submitted that the Supreme Court (1) erred in its approach; (2) had acted functus officio
in awarding C interest in an addendum to its judgment when the trial judge had not
awarded interest and the issue had not been raised on any cross-appeal.
Held Appeal dismissed.
(1) Cyclones were common in Mauritius and had to be taken as foreseeable. It was important
to identify the conjunction of circumstances constituting the event. If they were all
foreseeable then it was difficult to avoid the conclusion that G should have taken steps to
address them. Freak accidents could occur. The duty was to take those precautions
which were reasonably and practicably possible in the circumstances. Such an
approach was consistent with the United States case law following Hurricane Katrina. It was
open to the Supreme Court to find that the cyclone was unexceptional. Its findings that G
should have assessed the crane's safety in cyclonic conditions were well-founded in light of
G's employee's evidence. G had failed to call evidence to prove that the crane was designed
to withstand cyclones and the onus was on G to do so. If it had done so, some specific
further, external cause which could be regarded as irresistible would have to have
been proved to treat the accident as being due to force majeure. On the evidence, there
was no reason to differ from the Supreme Court's conclusion that G had not established that
the collapse and consequent damage to X and C was caused by an event of force majeure
(see paras 5, 7, 20-21, 33 of judgment).
(2) C had claimed interest but the trial judge had failed to order it. C should have given notice
of a cross-appeal and the addendum should not have been given without prior notice to G.
However, the Supreme Court would have acceded to such an application by C. It was
unnecessary to reach a conclusion as to whether the Supreme Court was functus officio as
the Privy Council had jurisdiction to make an order for interest even if there had not been a
purported order to that effect by the Supreme Court, Central Electricity Board of Mauritius v
Bata Shoe Co (Mauritius) Ltd [1983] 1 A.C. 105, [1982] 5 WLUK 206considered (paras 34,
38).