F A Tamplin Steamship Co., Ltd, and Anglo-Mexican Petroleum Products Co., Ltd (Re Arbitration)

Factual and Procedural Background

An oil-tank steamship was let under a five-year time charter beginning on 4 December 1912. After roughly two and a quarter years the vessel was twice requisitioned by the British Government for war service, the second requisition occurring in February 1915 and involving structural alterations for troop transport. Nineteen months of the charter term remained unexpired. A dispute arose as to whether the charter-party had thereby been brought to an end or merely suspended.

Pursuant to an arbitration clause, the matter was referred to Arbitrator Leek, who held that the contract had terminated. On an appeal by the charterers to the High Court, Judge Atkin reversed that award, and the Court of Appeal affirmed the High Court in [1916] 1 K.B. 485. The shipowners (now the Appellants) appealed to the House of Lords.

Legal Issues Presented

1. Whether the Government’s requisition of the vessel and the ensuing structural alterations frustrated the five-year time charter so as to discharge both parties from further performance.
2. Alternatively, whether the “restraint of princes” exception clause merely suspended, rather than terminated, the parties’ obligations during the period of requisition.

Arguments of the Parties

Appellants’ Arguments (Shipowners)

• The charter’s underlying purpose—commercial use of the tanker—became impossible once the Government took possession for an indeterminate period, thereby frustrating the contract.
• The extent of the requisition fell outside any temporary suspension envisaged by the “restraint of princes” clause; the contract should therefore be treated as either wholly terminated or at least indefinitely suspended.
• The charterers’ entitlement to retain higher hire paid by the Government would create an inequitable windfall inconsistent with the parties’ original bargain.

Respondents’ Arguments (Charterers)

• The requisition was expressly covered by the “restraint of princes” exception, which the parties had agreed would excuse performance without destroying the contract.
• The charter was for a fixed term of five years; temporary interruption—even of uncertain length—was within the commercial risk allocation adopted by the parties.
• The contract contemplated that the charterers might sub-let the vessel to the Admiralty; the Government’s use was therefore consistent with the charterers’ rights.

Table of Precedents Cited

Court's Reasoning and Analysis

The majority judgments (delivered by Judge Loreburn and Judge Parker, with Judge Chancellor concurring) focused on the contractual allocation of risk:

• Frustration requires an interruption “so great and long as to make it unreasonable to require the parties to go on with the adventure.” On the evidence available in February 1915, it was speculative whether the Government would retain the ship for the whole remaining term; months of commercial employment might still be possible.
• The charter expressly excepted “arrests and restraints of princes, rulers and people.” That clause immunised both parties from liability during the period of requisition while preserving their respective rights once the restraint ceased.
• The contract was a time charter, not a single-voyage venture; no specific joint commercial adventure was destroyed. The owners’ main interest was receipt of hire, which continued, while the charterers retained the potential benefit of future use.
• Implying a term that the charter would cease upon an indefinite but possibly temporary restraint would contradict the parties’ express allocation of risk in the exception clause.

In dissent, Judge Haldane and Judge Atkinson reasoned that:

• A contract dependent on availability of a specific chattel is dissolved when that availability is swept away for an unquantifiable period.
• The Government’s second requisition, coupled with structural changes, eradicated the foundation of the bargain; the “restraint of princes” clause could not resurrect a contract whose basis no longer existed.
• To hold otherwise would effectively impose new terms by compelling the parties to await an uncertain event—the vessel’s release—outside their contemplation.

Holding and Implications

APPEAL DISMISSED. The House of Lords, by majority, affirmed the Court of Appeal: the time charter remained in force, with obligations suspended (but not extinguished) during the period of governmental requisition.

Implications: The decision confirms that, under English law, a “restraint of princes” clause in a time charter will normally prevent frustration where the interruption, though potentially lengthy, is not shown to eliminate all realistic prospect of future performance within the contractual term. The ruling allocates wartime requisition risk according to the parties’ express contractual language and does not create new precedent beyond applying established principles of frustration and risk allocation.