shall be taken as the repaired value, and nothing in respect of the damaged or breakup value of the Vessel or wreck shall be taken into account.

In the event of Total or Constructive Total Loss, no claim to be made by the Underwriter for freight, whether notice of abandonment has been given or not.

In no case shall the Underwriter be liable for unrepaired damage in addition to a subsequent Total Loss sustained during the period covered by this Policy.

General Average, Salvage, and Special Charges payable as provided in the contract of affreightment, or failing such provision, or there be no contract of affreightment, payable in accordance with the Laws and Usages of the Port of New York. Provided always that when an adjustment according to the laws and uɛages of the port of destination is properly demanded by the owners of the cargo, General Average shall be paid in accordance with same.

And it is further agreed that in the event of salvage, towage or other assistance being rendered to the Vessel hereby insured by any Vessel belonging in part or in whole to the same Owners or Charterers, the value of such services (without regard to the common ownership or control of the Vessels) shall be I ascertained by arbitration in the manner below provided for under the Collision Clause, and the amount so awarded so far as applicable to the interest hereby insured shall constitute a charge under this Policy. When the contributory value of the Vessel is greater than the valuation herein the liability of the Underwriter for General Average contribution (except in respect to amount made good to the Vessel) or Salvage shall not exceed that proportion of the total contribution due from the Vessel that the amount insured hereunder bears to the contributory value; and if because of damage for which the Underwriter is liable as Particular Average the value of the Vessel has been reduced for the purpose of contribution, the amount of the Particular Average claim under this Policy shall be deducted from the amount insured hereunder and the Underwriter shall be liable only for the proportion which such net amount bears to the contributory value.

In the event of expenditure under the Sue and Labor Clause, this Policy shall pay the proportion of such expenses that the amount insured hereunder bears to the insured value of the Vessel, or that the amount insured hereunder, less loss and/or damage payable under this Policy, bears to the actual value of the salved property; whichever proportion shall be less.

If claim for total loss is admitted under this Policy and sue and labor expenses have been reasonably incurred in excess of any proceeds realized or value recovered, the amount payable under this Policy will be the proportion of such excess that the amount insured hereunder (without deduc

tion for loss or damage) bears to the insured value or the sound value of the Vessel at the time of the accident, whichever value was greater.

And it is further agreed that if the Vessel hereby insured shall come into collision with any other Ship or Vessel and the Assured or the Charterers or the Surety in consequence of the insured Vessel being at fault shall become liable to pay and shall pay by way of damages to any other person or persons any sum or sums in respect of such collision the Underwriter will pay the Assured, or the Charterers, or the Surety, whichever shall have paid, such proportion of such sum or sums so paid as its subscription hereto bears to the value of the Vessel hereby insured, provided always that its liability in respect to any one such collision shall not exceed its proportionate part of the value of the Vessel hereby insured. And in cases where the liability of the Vessel has been contested, or proceedings have been taken to limit liability, with the consent in writing of the Underwriter, it will also pay a like proportion of the costs which the Assured or Charterers shall thereby incur, or be compelled to pay; but when both Vessels are to blame, then, unless the liability of the Owners or Charterers of one or both such Vessels becomes limited by law, claims under the Collision Clause shall be settled on the principle of Cross-Liabilities as if the Owners or Charterers of each Vessel had been compelled to pay to the Owners or Charterers of the other of such Vessels such onehalf or other proportion of the latter's damages as may have been properly allowed in ascertaining the balance or sum payable by or to the Assured or Charterers in consequence of such collision; and it is further agreed that the principles involved in this clause shall apply to the case where both Vessels are the property, in part or in whole, of the same Owners or Charterers, all questions of responsibility and amount of liability as between the two Vessels being left to the decision of a single Arbitrator, if the parties can agree upon a single Arbitrator, or failing such agreement, to the decision of Arbitrators, one to be appointed by the Managing Owners or Charterers of both Vessels, and one to be appointed by the Underwriter; the two Arbitrators chosen to choose a third Arbitrator before entering upon the reference, and the decision of such single, or of any two of such three Arbitrators, appointed as above, to be final and binding. Provided always that this clause shall in no case extend to any sum which the Assured, or the Charterers, or the Surety, may become liable to pay or shall pay for removal of obstructions under statutory powers, for inJury to harbors, wharves, piers, stages, structures, or any other objects (excepting other Vessels and property thereon), consequent on such collision, or in respect of the cargo, baggage or engagements of the Insured Vessel, or for loss of life, or personal injury. And provided also that in the event of any

claim under this clause being made by anyone other than the Owners of the Vessel hereby insured, he shall not be entitled to recover in respect of any liability to which the Owners of the Vessel as such would not be subject, nor to a greater extent than the Owners would be entitled in such event to recover.

In witness whereof, the Maritime Administrator, acting for the Secretary of Commerce, has signed this Policy but it shall not be valid unless countersigned by an authorized underwriting agent.

UNITED STATES OF AMERICA, By Maritime Administrator, acting for the Secretary of Commerce.

1. Those risks which would be covered by the attached Policy (including the Collision Clause) in the absence of the F. C. and S. warranty and which shall be deemed to include, specifically, the risks of hostilities or warlike operations, piracy, civil war, revolution, rebellion or insurrection or civil strife arising therefrom, floating and/or stationary mines and/or torpedoes whether derelict or not, weapons of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter, and the application of sanctions under international agreements, whether before or after declaration of war and whether by a belligerent or otherwise, but excluding arrest, restraint or detainment under customs or quarantine regulations and similar arrests, restraints or detainments not arising from actual or impending hostilities or sanctions.

2. Damage to or destruction of the property insured directly caused by strikers, locked out workmen, or persons taking part in labor disturbances or riots or civil commotions or caused by persons acting mall

ciously, but this paragraph shall not be construed to include or cover any loss, damage or expense caused by or resulting from delay, detention or loss of use. This insurance is subject, however, to the following warrauties, exclusions and other provisions:

Warranted free from any claim for loss, damage or expense covered under any commercial policy in effect for the benefit of the assured.

Warranted free from any claim for loss. damage or expense which is or could be covered by a commercial war risk policy containing the American Institute War Risk and Strikes and Automatic Termination and Cancellation Clauses (Time)-Hulls(March 7, 1961).

Warranted free from any claim for delay or demurrage and warranted not to abandon in case of capture, seizure or detention, until after condemnation of the property insured.

Warranted free from any claim based upon loss of or frustration of the insured voyage or adventure caused by arrests, restraints or detainments, of kings, princes, or peoples.

Warranted free from any claim arising from capture, seizure, arrest, restraint, detainment, preemption, confiscation or requisition by the Government of the United States or of the country in which the Vessel is owned or registered or of the country in which any such right of requisition is vested.

The Franchise warranty in the attached Policy is waived and average will be payable irrespective of percentage and without deduction of new for old. The provisions of the attached Policy with respect to constructive total loss shall apply only to claims arising from physical damage to the insured Vessel.

If at the natural expiry time of this insurance the vessel is at sea, this insurance will be extended, provided notice be given to the Underwriter as soon as practicable and an additional premium paid, if required, until midnight, G.m.t. of the day on which the vessel enters the next port to which she proceeds and for 24 hours thereafter.

The "Breach of Warranty" clause in the Policy is deleted.

Warranted no War Risk Insurance in excess of the amount insured herein, whether for hull, machinery, disbursements, or other similar interests however described, exists or will be placed during the currency of this insurance, except as authorized by the Maritime Administrator, acting for the Secretary of Commerce.

Warranted no cancellation except by mutual consent; Provided, however, That if the Vessel shall be requisitioned by the United States on a basis whereby the United States provides the war risk insurance, then this insurance shall terminate and pro rata daily return premium shall be paid. In no other event shall there be any return of premium

For the purpose of determining liability under this policy for General Average contribution or Salvage and sue and labor ex

Sum to be insured $______ but not exceeding $750.00 per gross ton of the vessel.

To attach automatically upon and simultaneously with the outbreak of war (whether there be a declaration of war or not) between any of the following countries: United States of America, United Kingdom, France, the Union of Soviet Socialist Republics, the People's Republic of China; upon the occurrence of any prior hostile act or acts by any of the said countries resulting in such outbreak of war and occurring within a period of 90 days preceding such outbreak of

To terminate thirty (30) days after the outbreak of war (whether there be a declaration of war or not) between any of the aforesaid countries.

Terms and conditions: Subject to form of policy prescribed by the Maritime Administrator, acting for the Secretary of Commerce. The category (one only) of eligibility under which application is made must be designated.

(a)

A vessel registered, enrolled or licensed under the laws of the United States; any tug or barge or other watercraft (documented under the laws of the United States, or undocumented) owned by a citizen of the United States, used in essential water transportation within the territorial waters of the United States; and United States citizenowned watercraft in the fishing trade or industry, except when used exclusively in or for sport fishing.

(b)(1)

A foreign-flag vessel under Panamanian, Honduran or Liberian registry, 1,500 gross tons and over, self-propelled, and not over twenty years of age (unless authorized by the Maritime Administration), which is subject to an unqualified Contract of Commitment with the United States in form as required by the Maritime Administration, and which is owned by a U.S. corporation, or a foreign corporation in which a majority of the stock is owned and controlled by United States citizens, whether direct or through intervening corporations, foreign or domestic. Where such intervening corporations are foreign, the ultimate majority ownership and control of the stock of such corporations must be vested in a citizen or citizens of the United States as defined in section 1201 (d), Merchant Marine Act, 1936, as amended.

(b) (2)

A foreign-flag vessel under Panamanian, Honduran or Liberian registry, 1,500 gross tons and over, self-propelled, and not over twenty years of age (unless authorized by the Maritime Administration), which is subject to an unqualified Contract of Commitment with the United States in form as required by the Maritime Administration, and which is owned by a foreign corporation which is not directly or beneficially owned by United States citizens or corporations, but which vessel is under a long-term charter or other long-term contract covering the use of the vessel on terms deemed by the Maritime Administration to subject the vessel to U.S. control in the event of emergency. The charterer of such a vessel must be either a U.S. corporation or a foreign corporation in which a majority of the stock is owned and controlled by U.S. citizens, whether direct or through intervening corporations, foreign or domestic. Where such intervening corporations are foreign, the ultimate majority ownership and control of the stock of such

corporations must be vested in a citizen or citizens of the United States as defined in section 1201(d), Merchant Marine Act, 1936, as amended.

☐ (c)

All other vessels will be insured at the sole discretion of the Maritime Administrator but only when engaged in a service which has been determined by the Maritime Administrator to be in the interest of the national defense or the national economy of the United States.

It is warranted, as to a vessel in any of the above categories, that at all times during the binder period or any period of insurance attaching thereunder, the vessel will comply with Department of Commerce Transportation Orders T-1 and T-2 or any modification thereof so long as they remain in force.

The applicant warrants as to a vessel in any eligible category of the application that. without prior approval of the Maritime Administration, the vessel will not, at any time during the binder period or any period of insurance attaching hereunder, be chartered for a period of longer than six (6) months, or for a voyage or voyages the duration of which will probably exceed six (6) months, to any person not a citizen of the United States. nor be chartered to such a non-citizen under a demise or bareboat form of charter, nor be chartered to such a non-citizen for the carriage of cargoes of any kind to or from any of the countries listed in Maritime Administration General Order 59 or any modification thereof so long as it remains in force, or for use in the fisheries.

The applicant further warrants with respect to a vessel in category (a) that at and from the date of issuance of the interim binder and for and during the term of any insurance attaching thereunder, such vessel will remain eligible within its category.

The applicant further warrants with respect to a vessel in category (b) (1) or (b) (2) that the vessel will maintain its eligibility within its applicable category at all times from and after the issuance of the interim binder, and will be made available to the United States Government upon request in the event of national emergency pursuant to the terms of the Contract of Commitment submitted herewith; and agrees, in this connection, that during the period of the binder and any insurance attaching thereunder, any charter or other contract covering the use of the vessel during such period shall be subject to termination or suspension without notice in the event the United States requires the use of the vessel under the voluntary Contract of Commitment submitted herewith.

With respect to a vessel in category (c), the applicant further warrants that at all times such vessel will remain in the approved service which the Maritime Administrator has found to be in the interest of

the national economy or the national defense of the United States.

In addition to the aforesaid warranties, the applicant submits certain statements, certificates and/or agreements which are made part of the insurance application, for vessels in the following categories:

Category (b) (1) applications: (a) An executed Contract of Commitment, in form as prescribed in § 308.5, under which applicant commits itself to make the vessel available to the U.S. Government upon request in the event of national emergency on the same terms and conditions as vessels owned by citizens of the United States are available for requisition, for title, or for use, in accordance with the provisions of section 902(a), Merchant Marine Act, 1936, amended. In the event this insurance application is determined to be ineligible under the terms of the Maritime Administration's regulations, it is understood that the applicant will be so advised and the executed Contract of Commitment (which is submitted in consideration of the issuance of such insurance) shall be returned to applicant by the Maritime Administration. (b) A certificate of citizenship, in duplicate, executed by the vessel owner establishing that the vessel is owned by a U.S. corporation, or that a majority of the stock of the owning corporation is owned and controlled by U.S. citizens, as defined in section 1201 (d), Merchant Marine Act, 1936, as amended, whether direct or through intervening corporations, foreign or domestic. (c) Where such intervening corporations are foreign, an additional certificate in duplicate, shall be executed by each such corporation establishing that the ultimate majority ownership and control of the stock of such corporation is vested in a citizen or citizens of the United States as defined in section 1201 (d), Merchant Marine Act, 1936, as amended.

All citizenship certificates shall be in the form prescribed in § 308.4. (d) If prior official action or approval of the Contract of Commitment with the United States is required by the government of the country of vessel's registry as a prerequisite to the execution of such a contract, applicant attaches a certified copy of such official action or approval. If a vessel in category (b)(1) attains twenty years of age on or prior to the effective date of this insurance, applicant agrees that the subject insurance shall not attach without Maritime Administration approval.

Category (b) (2) applications: (a) A Contract of Commitment executed by both the owner and charterer in form as prescribed in § 308.5, under which they commit themselves to make the vessel available to the U.S. Government upon request in the event of national emergency on the same terms and conditions as vessels owned by citizens of the United States are available for requisition, for title, or for use, in accordance with the provisions of section 902(a), Merchant Marine Act, 1936, as amended. In the event

this insurance application is determined to be ineligible under the terms of the Maritime Administration's regulations, it is understood that the applicants will be so advised and the executed Contract of Commitment (which is submitted in consideration of the issuance of such insurance) shall be returned by the Maritime Administration. (b) A copy of the long-term charter or other longterm contract covering the use of the vessel and all addenda, certified to be full and complete copies (except as to rate of hire or freight). The charterer also agrees to furnish the Maritime Adminstration a certified copy of any subsequent amendments to such charter. (c) A certificate of citizenship, in duplicate, executed by the charterer establishing that it is a U.S. corporation, or a foreign corporation in which a majority of the stock is owned and controlled by U.S. citizens, whether direct or through intervening corporations, which may be either foreign or domestic. (d) Where such intervening corporations are foreign, an additional certificate, in duplicate, shall be executed by each such corporation establishing that the ultimate majority ownership and control of the stock of such corporation is vested in a citizen or citizens of the United States as defined in section 1201 (d), Merchant Marine Act, 1936, as amended. All citizenship certificates shall be in the form prescribed in § 308.4. (e) If prior official action or approval of the Contract of Commitment with the United States is required by the government of the country of vessel's registry as a prerequisite to the execution of such a contract, applicants attach a certified copy of such official action or approval. If a vessel in category (b) (2) attains twenty years of age on or prior to the effective date of this insurance, applicants agree that the subject insurance shall not attach without Maritime Adminstration approval.

Category (c) applications: A copy of the statement of vessel's service previously submitted by the applicant, which was the subject of a finding by the Maritime Administrator that such service is deemed to be in the interest of the national defense or the national economy of the United States.

Warranted free from any claim for loss, damage or expense covered under any commercial policy in effect for the benefit of the assured.

Warranted free from any claim for loss, damage or expense which is or could be covered by a commercial war risk policy containing the American Institute War Risk and Strikes and Automatic Termination and Cancellation Clauses (Time)-Hulls-(March 7, 1961).

The warranties and representations in this application, which are made in consideration of the issuance of the insurance above indicated, shall become a part of and be deemed incorporated in the binder and in any insurance policy issued thereunder, to the same extent as though set out in full in such documents.

(Applications on category (a) vessels to be submitted, in duplicate, with required attachments, to the American War Risk Agency, 99 John Street, New York 38, N.Y. Applications on all other vessels to be submitted, in triplicate, with required attachments, to the Division of Insurance, U.S. Maritime Administration, Washington 25, D.C.)

[G.O. 75, 2d Rev., 26 F.R. 4541, May 26, 1961, as amended by Amdt. 1, 27 F.R. 4028, Apr. 27, 1962; Amdt. 10, 31 F.R. 1201, Jan. 29, 1966]

§ 308.202

Issuance of interim binder;

its terms and conditions.

Upon acceptance of an application, an interim binder in form as set forth in § 308.206 will be issued and there shall be deemed to be incorporated therein by reference all the terms, conditions, and warranties contained in the application for war risk protection and indemnity insurance (set forth in § 308.201) and the standard war risk protection and indemnity insurance policy (set forth in § 308.207) to the same extent as if such application and policy were made a part of the binder. The binding fee shall be $25.00.

§ 308.203 Sum which will be insured under interim binder.

The sum insured shall be the amount stated in the application, but not in excess of $750.00 per gross ton of the vessel. [G.O. 75, 2d Rev., 26 F.R. 4541, May 26, 1961, as amended by Amdt. 1, 27 F.R. 4028, Apr. 27, 1962]