Ocean Tramp Tankers Corporation v V/O Sovfracht (The Eugenia) [1964] 2 QB 226 is a leading authority on frustration and commercial impracticability.

Facts of the Case

In September 1956, the defendants chartered The Eugenia for a “trip out to India via the Black Sea”. Both parties were aware the Suez Canal might close due to military activity, and tried but failed to agree a clause addressing it, leaving the contract silent. A “war clause” prohibited ordering the vessel into a zone “dangerous as the result of any actual or threatened act of war”. Despite the zone being dangerous, the vessel entered the Suez Canal on 31 October 1956 and became trapped until January 1957. The charterers claimed frustration; the owners sued for breach of the war clause.

The Judgment

The Court of Appeal (Lord Denning MR) ruled for the shipowners:

  • Self-induced frustration: the charterers could not rely on the vessel being trapped, as they were in breach of the war clause by entering — “self-induced” frustration.
  • No frustration by blockage: even staying outside, the vessel would travel via the Cape of Good Hope — 138 days versus 108 via Suez — a difference not “so radical as to produce a frustration”.

Key Legal Principles and Authority

  • The “radically different” standard: applying Davis Contractors, frustration occurs only where performance becomes “a thing radically different from that which was undertaken by the contract”.
  • Foreseeability vs. provision: Denning LJ argued it is not essential that an event be unforeseen; the question is whether the parties made provision for it. If foreseen but unprovided for, the doctrine may still apply if the new situation is radically different.
  • Hardship and expense: a contract becoming more onerous or expensive does not frustrate it; it must be “positively unjust” to hold the parties bound.
  • Authority: a leading case on commercial impracticability — a significant increase in length and cost of a voyage does not typically frustrate a contract.

Related Cases

  • Davis Contractors Ltd v Fareham UDC: the “radically different” test; mere delay and extra expense do not discharge a contract.
  • WJ Tatem Ltd v Gamboa: a rare case of frustration despite the event being foreseen, because no provision had been made.
  • Tsakiroglou & Co Ltd v Noblee Thorl GmbH: the Suez closure did not frustrate a sale of goods even though the Cape route was twice as long.
  • Maritime National Fish Ltd v Ocean Trawlers Ltd: used to prevent reliance on frustration where the “human choice” to enter the danger zone was the charterers’ own.