FA Tamplin – a WWI time charter ‘test case’ on frustration

Posted: 13/02/2025

This year marks the bicentennial anniversary of the founding of heritage maritime law firm Thomas Cooper in 1825. To celebrate this occasion, lawyers from Penningtons Manches Cooper will, for each month of 2025, be chronicling a different seminal case conducted by Thomas Cooper across its two centuries of English legal practice.

The second instalment in this series focuses on the House of Lords’ judgment in FA Tamplin Steamship Co Ltd v Anglo-Mexican Petroleum Products Co Ltd [1916] UKHL 433; the first case in which the courts applied the doctrine of frustration to a time charter. By 1916, Thomas Cooper was a partnership of seven, operating from offices at 21 Leadenhall Street, London.

The year of attrition

Britain was in the thick of the First World War in 1916. The year witnessed two of the longest and most notorious battles, at Verdun and the Somme, resulting in hundreds of thousands of casualties, as well as zeppelin raids over England. The largest sea battle of the war at Jutland saw Britain secure naval supremacy, but at great cost to its own fleet.

As these colossal engagements ensued, it was the ability of the Allies at sea to sustain global transport and supply that determined their ability to prevail. Immediately upon the outbreak of war, the British government empowered the Admiralty to requisition the civilian ships it needed. From August 1914, over 1,000 ships totalling four million gross tons were promptly taken over for naval use, with the aggregate figure rising to six million by the end of 1915.

A tanker used to transport soldiers

At this time, Thomas Cooper had been before the House of Lords on a ‘test case’ concerning the effect of such a requisition on a time charter in which it was acting for the charterers. 

The brand-new Tyne-built ‘tank steamer’ FA Tamplin, constructed by Palmers of Hebburn, had been chartered for the carriage of refined petroleum and/or crude oil products for five years from 5 December 1912 to 4 December 1917. The charter contained an exceptions clause which included ‘restraint of princes, rulers and people’ and a liberty to sub-let the vessel on Admiralty or other service.

For the first two years, the charter ran its course. However, in early December 1914 the steamer was requisitioned by the British government for Admiralty transport service until 10 February 1915. Around that date, the Admiralty’s director of transports gave further notice to the charterers that the vessel was again requisitioned and would be specially fitted. The Admiralty ordered the vessel to Liverpool where structural alterations were made, so FA Tamplin could be used to transport troops.

The owners and charterers disputed which of them was entitled to the remuneration paid by the Admiralty, which was substantially more than the charter hire. The charterers were happy to go on paying the hire while receiving the Admiralty remuneration, as if they had sub-let the vessel.

The parties underwent arbitration, with the arbitrator finding that the charter came to an end in February 1915. That award was successfully appealed before the High Court in July 1915. It was clear that if the charterers had unilaterally adapted the vessel to carry infantry, this would have amounted to a breach of contract, entitling the owners to terminate. However, in the circumstances, the charterers had done nothing wrong, even though they would not have had the right to sub-let the vessel in this manner. Judge Atkin held there was no basis for finding the contract had come to an end.

The owners’ further appeal was dismissed by the Court of Appeal, comprising Lord Justices Bankes and Warrington, in December 1915. Both esteemed judges held that the charter was not frustrated, as the parties were still deriving a substantial part of the benefit under it, and there was nothing to prevent the charterers resuming the charter once the requisition ceased. Lord Justice Bankes further observed that ‘the interruption … is of a nature which was contemplated by the parties and provided for by the introduction of the exception relating to restraint of princes’.

Appeal to the House of Lords

The second requisition was still in effect when the case came before the House of Lords, with 19 months of the charter unexpired. A majority of their lordships also found the charter was not frustrated.

It is now trite law that a contract is frustrated if its performance becomes radically different to that originally contemplated. The appropriate question is whether the contract is, on its true construction, wide enough to apply to the new situation. However, the doctrine of frustration was at an earlier stage of development in 1916, being still based around the idea that a party might only escape a contract if a term could be implied into it that defined the expected outcome and thereby brought the contract to an end, on grounds that that was what the parties presumptively intended.

The only term Earl Loreburn would imply was one excusing the parties ‘if substantially the whole contract became impossible of performance, or in other words impracticable, by some cause for which neither was responsible’. This would not avail the owners, as the charter had many months left to run.

Lord Parker, with whom Lord Chancellor Baron Buckmaster concurred, observed that the principle by which a contract is frustrated ‘is one of contract law, depending on some term or condition to be implied in the contract itself and not on something entirely dehors the contract…’ This was more easily done in the case of a voyage charter than a time charter, as protracted delay could mean a seasonal voyage had become different to the one originally contemplated.

In any event, it would not be possible to imply a term that was inconsistent with the express terms. The requisition was clearly a ‘restraint of princes’ within the meaning of the exceptions clause: ‘The parties therefore have expressly contracted that during the period during which by reason of such restraint the owners are unable to keep the ship at the disposition of the charterers the freight is to continue payable and the owners are to be free from liability. This period may be long or short. It may be certain or indefinite. It may occur towards the beginning or towards the end of the charter-party. The result is to be the same…’

Lord Parker was accordingly not willing to imply any term that would have the effect of determining the contract, even one where the requisition ‘will in all reasonable probability extend beyond the term of the charter-party’.

Legacy

FA Tamplin survived the war to end all wars, only to succumb during its sequel. Renamed Potrero del Llano and under the control of the government of Mexico, the vessel was on an unescorted voyage from Tampico to New York, crewed by marines, and carrying a cargo of petroleum. At around midnight on 14 May 1942, 14 miles south east of Miami, the vessel was torpedoed by U-boat U564 and split in two, with the loss of 14 crew. Mexico declared war on the Axis powers on 22 May 1942, after its protest and demand for an indemnity was ignored.

The implied term test for a frustrating event is also no more. A common objection across later decades was that the test was artificial, involving a fiction that the court, when excusing performance, did no more than give the parties what they would have given themselves had they foreseen the risk at the time of contracting. In reality, the court could only speculate that the parties would have agreed on absolution, whereas the real litigants might have conceived of some other adjustment to the contracting terms.

Nonetheless, the House of Lords’ decision remains high authority on the effect of wartime requisition on a time charter. It is true that modern charter parties may often contain war clauses or government requisition clauses specifically dealing with this issue. However, the ever-popular NYPE 46 time charter form does not. It contains only the mutual exception of ‘restraint of princes’, in a time where there are again murmurings of war on the world stage.

Return to news headlines