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Monarch Steamship v Karlshamns - 1949

337 words (1 pages) Case Summary

16th Jul 2019 Case Summary Reference this In-house law team

Jurisdiction / Tag(s): UK Law

Monarch Steamship Co Ltd v Karlshamms Oljefabriker [1949] AC 196

Unseaworthiness of vessel; outbreak of war; recoverability of damages

Facts

Karlshamms Oljiefabriker (KO) entered a contract in April 1939 with Monarch Steamship Co (MSC) to transport beans to a specific port. Delays occurred owing to the unseaworthiness of the vessel, and it did not reach the designated port prior to the outbreak of World War Two. The British Admiralty prohibited the ship from continuing, and KO claimed for breach of contract.

Issues

MSC contended they were only obliged to fulfil the contract if the British Government permitted it. The delivery was prevented under Admiralty orders which MSC were obliged to obey. The war risk clause within the contract absolved them of liability if war broke out. Unseaworthiness was not causative of the failed delivery because the Admiralty orders were an independent executive act preventing delivery, whether the vessel was seaworthy or not. KO contended there was a failure to deliver the cargo because of the unseaworthiness of the vessel, which was in breach of contract. KO argued MSC knew of the unseaworthiness and but for the delays to repair it, the vessel would have reached its destination before war broke out. The war clause could not assist MSC because the contractual breach occurred before the war broke out, causing the delay and necessitating the chartering of neutral ships to transport the cargo. The inclusion of the war clause proved war was in the contemplation of the parties.

Decision/Outcome

KO’s claim was successful. The effective cause of the delay was the unseaworthiness of the vessel. In view of the international conditions at the material time, they should have foreseen that war may break out causing the loss or diversion of the ship. War had not broken the chain of causation, and KO could recover the costs of chartering the neutral ships.

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UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.

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