American Trading And Production Corp. v. Shell Int'l Marine, Ltd.,

453 F.2d 939 (3d Cir. 1972)

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Nature of the Case

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Facts

Shell (D) contracted with American Trading (P) on March 23, 1967, to take lube oil from Texas to Bombay at the prevailing rate under the American Tanker Rate Schedule (ATRS). This was $14.25 per long ton of cargo, plus 75%, and $.85 per long ton for passage through the Suez Canal. After departing on May 15, 1967, the Washington Trader was advised of a possible diversion due to a war, Suez Canal crises, but P continued towards the Canal. The Canal was closed, and P was forced to travel 9000 miles around the Cape of Good Hope. D was contacted, and diversion approval was requested. D said it was P's decision because the contract required delivery of the cargo without qualification of the route. P advised D that it would proceed via the Cape of Good Hope and would reserve all rights to extra compensation. P arrived 30 days too late and traveled 18,055 miles instead of 9,709. P sued D to recover $131,978.44 for the extra expenses; the closure of the canal discharged performance under the contract. The trial court dismissed P's claim. P appealed.