The Eugenia (Ocean Tramp Tankers Corp v V/O Sovfracht) [1964]

Court: Court of Appeal

Facts: The dispute involved The Eugenia, a ship carrying iron and steel, which was chartered by V/O Sovfracht from Ocean Tramp Tankers Corp. The ship was en route from Genoa to India via Odessa, with an intended passage through the Suez Canal, a zone designated as dangerous due to ongoing conflict. The charterers breached the contract’s war clause, which required them to avoid such areas, by attempting to navigate the canal. After the canal closed, the ship was impounded, and the charterers abandoned the contract, claiming frustration. The owners contested this, arguing a breach of contract.

Issue: Could the charterers claim frustration of contract due to the impoundment, despite their decision to breach the war clause by entering the Suez Canal?

Held: Lord Denning MR rejected the claim of frustration, holding that the charterers could not rely on a self-induced event to claim frustration. The impoundment of the ship was a result of their decision to enter the dangerous zone, contrary to the contract's terms. If they had taken the alternative route around the Cape of Good Hope, the contract would not have been fundamentally altered.

Key Judicial Statement: Lord Denning stated, "Frustration cannot be claimed where the frustrating event is self-induced, and the contract's performance, though more onerous, must remain enforceable unless it becomes positively unjust to do so."

💡Leveluplaw: This case highlights the principle that frustration in contract law cannot be claimed where the frustrating event arises from a party's own breach. It further clarifies that frustration only applies when the performance of the contract becomes radically different, not simply more difficult or expensive.