Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524

Maritime National Fish chartered a steam trawler from Ocean Trawlers. Operating the relevant fishing gear required a licence. The charterer sought licences for five vessels but received only three and was asked to identify the vessels to which they would apply. It allocated the available licences to other vessels, leaving the chartered trawler without one. It then argued that the charter had been frustrated and resisted the claim by the owner for hire. The dispute concerned the effect of the regulatory restriction and the charterer's own choice about allocating the licences it had obtained.

Was the charter frustrated by the lack of a licence for the trawler when the charterer had chosen to allocate its available licences to other vessels?

The Privy Council held that the charter was not frustrated. The charterer received fewer licences than the number of vessels it wished to operate, but it could choose which vessels the available licences covered. It allocated them to other vessels instead of the chartered trawler. The inability to use that trawler therefore depended on its own election, not solely an external prohibition making the agreed performance unavoidable. The charterer remained liable for hire. The decision does not require proof that it acted dishonestly; the point was the allocation of contractual risk and available choice. It also does not establish that every refusal of a regulatory licence is incapable of frustrating a contract.

Frustration cannot be founded on an inability to perform that results from the relying party's own allocation decision where a relevant choice remains. A shortage of licences must be analysed with the available licences and the party's election, rather than treated automatically as external impossibility.

Maritime National Fish is the leading example of self-induced frustration through choice of resources. It should be compared with The Super Servant Two, which addresses allocation of an alternative vessel. Neither decision simply says that external events are irrelevant when a business has several commitments. The question is whether the alleged impossibility arises from the event itself or from the party's decision about meeting competing obligations. Correctly identifying who held and allocated the licences is essential to understanding the outcome.