Contracts Keyed to Dawson
American Trading and Production Corp. v. Shell Int’l Marine Ltd.
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The Plaintiff, American Trading and Production Corp. (the "Plaintiff"), and the Defendant, Shell International Marine, Ltd. (the "Defendant"), contracted on March 23, 1967 for the Plaintiff to deliver oil from Texas to India by way of the Suez Canal. The contract required the Defendant to charter the Plaintiff's "tank vessel, WASHINGTON TRADER" to transport the oil. The freight weight was to be "in accordance with the then prevailing American Tanker Rate Schedule ("ATRS"), $14.25 per long ton of cargo, plus seventy-five percent (75%), and in addition there was a charge of $.85 per long ton for passage through the Suez Canal." On May 26, 1967, the total freight was $417,327.36. On May 29, 1967, the Plaintiff was put on notice about an impending crisis and possible diversion in the Suez Canal, but despite this possibility, the Plaintiff continued on the same route. War broke out in the Middle East, and passage through the Suez Canal became impossible. Instead, the Plaintiff was forced to travel to Bombay via the Cape. Prior to traveling via the Cape, the Plaintiff reserved the right for extra compensation. The trip through the Cape added over 9,000 miles to the original voyage. As such, the Plaintiff billed the Defendant $131, 978.44 as extra compensation. The Defendant refused to pay and this suit followed. The Plaintiff argued that the closure of the Suez Canal made this trip impossible, but the trial court disagreed.
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