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Shortly before the time at which the ship was to have entered upon the performance of the charter, she was requisitioned on behalf of His Majesty's Government. For some reason the ship- owners thought that after a few months she would be again placed at their disposal and on the 5th April, 1917, they wrote to the charterers to ask whether they would be prepared to take up the charter after the release of the vessel. The charterers, whether on independent information of their own or on these expressed antici- pations of the owners, replied on the 12th May that they would require the steamer when released. Some correspondence passed in the autumn, which showed that the charterers then desired to know when the ship would be free, and that the shipowners were unable to find this out. Then there followed a long silence. From the 11th October, 1917, to March, 1919, no communication passed between the parties.
The "Singaporean" continued in Government service until late in February, 1919. On the 2nd March, 1919, the shipowners' agents informed the charterers of her release and asked who would take delivery of the ship on their behalf at Singapore. The charterers replied on the 4th March that it was now useless to offer delivery, giving as their reason that the charter had long expired. To this contention they adhered until and at the trial, when it was decided against them by the Chief Justice, who gave judgment for the plaintiffs in the action.
By the charter the ten months for which it was to be in force did not run from any specified date, but from the time at which the ship was placed at the disposal of the charterers. It was clearly a misapprehension on the charterers' part to say simply that the charter had expired by effluxion of time. The Trial Judge, on the other hand, says that an admission was made before him that the correspondence amounted to an exercise of the cancelling option in favour of maintaining the charter. This must be a mistake, for the only option mentioned is an option to cancel, and a decision to maintain the charter would not be an Nevertheless he exercise of any opinion under this clause. made use of this to support his view, repeated by him on the appeal but with some hesitation, that, by affirmatively electing not to cancel the charter, when the 1st March, 1917, passed with- out the ship being placed at their disposal, the charterers, who had full knowledge of the fact of the requisition, so conducted themselves as to oust the doctrine of frustration. He thought that they must be deemed to have relied on arrangements of their own to provide for such a case, so that no implication could arise. The charterers had agreed to take the ship, and therefore were ready to protect themselves.
This view may be shortly disposed of. Their Lordships think that on the facts it was untenable, and in argument before them it was not supported. The cancelling clause clearly was never put into operation by the charterers, and the term of the charter
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therefore remained unaffected by it. Counsel admitted before the Board, and rightly on the materials, that the communications which passed on the 5th April and the 12th May, 1917, did not amount to a new contract or in any way vary the contract con- if tained in the charter-party. No new promise was made nor, there had been any new promise in form, was there considera- tion to support it. The parties were over-sanguine. If they thought that the delay would not frustrate the charter, events showed that they were wrong and their error left their position unaffected.
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On appeal to the Full Court there was a considerable divergence of opinion among the Judges (see 19 Hong Kong L.R. p. 12), the appeal being eventually dismissed by a majority (the Chief Justice and Gompertz, J., Sir Skinner Turner dissenting).
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The case made by the appellant charterers was throughout that the arbitrator had no jurisdiction. The claim made against them, with which he had purported to deal, could not be said to be a dispute arising under this charter" in the words of the clause, seeing that, before it was made or any question arose, the whole charter had come to an end by frustration of its objects in con- sequence of the requisitioning of the ship. The shipowners sup- ported the view above set out, and, further said (in addition to points arising out of the state of the pleadings, which are not now material), that there had been no frustration, and that, even if this were not so, the clause continued to apply and was a submis- sion effective to give the arbitrator jurisdiction. On this point, on which he had expressed no opinion at the trial, the Chief Justice agreed with Gompertz, J., on the appeal. Their conclusion, as expressed in the judgment of the latter learned Judge may be thus summarised. Frustration of a contract depends upon the express and implied terms of the contract itself. Such a question is therefore within a clause which refers " any dispute under the contract" to arbitration. Here the decision is not on a point collateral to the merits-the finding is on the merita-and on the very matters as to which the parties have agreed that the award should be final. Many authorities were cited, and much reliance was placed on Scott v. Del Sel (1923, S.C. (H.L.) 38), of which, unfortunately, the Court had only a brief note and not the full report before them. Sir Skinner Turner held that the contract having been still executory when the requisition occurred, the effect on the contract was that its object was frustrated by the delay caused thereby, and consequently the whole charter, including the arbitration clause, had come to an end before the shipowners raised their claim that it was still in force.
Upon the question of frustration the case is a typical one, and is governed both in its facts and its law by the Bank Line v. Capel (1919, A.C. 435). A great many charter-parties have been dealt with during the last few years on indistinguishably similar facts and have been held to have been frustrated by reason of the requisi-
(B 40-4386-3)T
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