The Grotius, Sheafe, Master case was a dispute between the owners of an American vessel and its British captors. The ship had been seized by the British during the War of 1812 for carrying contraband goods to France. The Supreme Court determined that while it was true that neutral vessels could not carry contraband goods to enemy ports without being liable to capture, this particular seizure violated international law because it occurred in a place where there were no hostilities at the time. Furthermore, since Britain had already declared war on America prior to seizing the vessel, they should have respected America's neutrality rights as outlined in international treaties and customary law. As such, damages were awarded against Britain for their wrongful act of capturing an American merchantman outside of any active theater of war or other hostile zone.

The Grotius, Sheafe, Master case was a dispute between the United States and Great Britain over the capture of an American vessel by a British warship. The majority opinion held that the seizure of the vessel was illegal under international law because it occurred in neutral waters. However, Justice Story dissented from this decision on two grounds: firstly, he argued that there were no clear rules governing such captures at sea; and secondly, he maintained that even if there had been such rules they would not have applied to vessels engaged in contraband trade as was alleged here. He further contended that since both nations had agreed to abide by certain maritime regulations prior to hostilities breaking out then those same regulations should be used for determining whether or not any particular act constituted an illegal capture. In conclusion Justice Story asserted his belief that while some degree of leniency may be appropriate when dealing with wartime captures it is important to remember that all belligerents must still adhere strictly to established principles of international law when engaging in naval warfare.