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Agreement with regard to ships time-charter by the French government and to the cargoes loaded in those vessels which have been or will be paid for by the French government

1. Ships in U.K. Ports
(a) Empty ships
France will give up immediately all such vessels and the Ministry 0f Shipping will accordingly arrange with the shipowners to take over the Charter Parties signed by the French Mission. As from the date when each ship is chartered by the Ministry of Shipping, the French Mission will relinquish all rights under their charter party in respect of such vessel.
(b) Ships loaded
The above will also apply to the ships loaded, and the Ministry of Shipping will give to the Port Authorities instructions to unload such ships.
The Ministry of Supply and the Ministry of Food will take all cargoes of the type which they purchase normally which have been or will be paid for by the French Government.
The price to be paid for these cargoes will, unless the contract price was substantially above that paid for comparable purchases by or on behalf of H.M. Government, be calculated as follows:-

(1) in the case of those cargoes originally sold f.o.b, the contract price plus a sum equal to the prevailing rates of freight in the British Shipping Pool for the carriage of such cargo to the U.K. and a sum equal to the Ministry of Shipping War Risks Office rate for insurance of such cargo.
(11) ln the case of cargoes originally sold c.i.f. the contract price subject to (1) a reduction in order to bring the freight rate down to the rate of freight prevailing in the British Shipping Pool for the carriage of such cargoes to the U.K. and (2) a déduction of such part of the c.i.f. price as represents the excess cost of insurance, if any, over the Ministry of Shipping War Risks Office rate for insurance of such cargo.
If in any particular case it is shewn that the contract price was substantially above that paid for comparable purchases by or on behalf of H.M. Government, a price will be agreed.
The expenses of discharging the cargo will be paid by the Department by whom it is purchased.
In the case of cargoes of a type which the Ministry of Supply and the Ministry of Food do not normally purchase, a special arrangement will be made with regard to the price.
In the case of ships loaded with coal, the Mines Department will arrange for the disposal of the cargo. The price to be paid to the French Government will be the subject of further discussion.
The French Government will indemnity H.M. Government against any claims of whatsoever nature by third parties claiming any property or interest in the cargo.
2. Ships abroad
(a) Allied ships and ships under British Flag
Owing to the fact that H.M. Government and other Allied Governments or Committees of Shipowners will not allow these ships to trade with French Ports, the French Mission will advise the Ministry of Shipping of the name and position of the ships. In the same way as for the ships in United Kingdom ports they will hand over immediately all such vessels, and it will therefore be left to the Ministry of Shipping to arrange with the shipowners or ship managers for the Charter Parties to be transferred to them, whether the ships are empty or loaded. As from the date when each ship is chartered by the Ministry of Shipping, the French Mission will relinquish all rights under their charter party in respect of such ship,
Cargoes
In the case of laden ships, these will be directed according to instructions from H.M. Government and the cargoes taken over and unloaded by them, on the same basis and the same terms and conditions as above in Paragraph 1 (b), subject to the proviso that credit for freight and insurance will be due to the French Mission only in respect of the voyage to the place and the time at which the ship is delivered to the Ministry of Shipping on time charter.
(b) Neutral ships, trading between foreign countries and France or foreign countries and French possessions will be handed over, whether empty or loaded, in the same way and on the same terms and conditions as ships in United Kingdom Ports, or Allied and other ships abroad. As from the date when each ship is chartered by the Ministry of Shipping, the French Mission will relinquish all rights under their charter party in respect of such vessel.
3. The French Mission will be responsible for payment of all amounts due in respect of any charter party completed by them and all other expenses of the ship up to the date when the ship is transferred, in accordance with Paragraphs 1 and 2 above, to time charter by the Ministry of Shipping. Any amounts paid in advance by the French Mission in respect of hire, insurance, etc., for any period during which the vessel is on Ministry of Shipping time charter will be credited to the French Mission. Should any expenses or disbursements have been paid by H.M. Government, the amount will be debited to the French Mission.
The French Sea Transport Mission will arrange with the Ministry of Shipping all details in connection with the adjustments and payments of hire, insurance, bonuses to crews, bunker expenses, etc.
4. Any amount due to the French Government in pursuance of the above arrangements will be credited to a special Suspense Account.
5. The French Mission undertakes on behalf of the French Government that no ship covered by this agreement will be detained in any port
in France or French Possessions, or in any way prevented from carrying out the orders of the Ministry of Shipping as time charterers, whether with or without cargo for France or other commitments to French charterers and that no steps will be taken to arrest any such ship by judicial process in any country.
6. For the purpose of this agreement, the expression "rates of freight" in the British Shipping Pool" means the national rate of freight fixed from time to time by the Ministry of Shipping for the purpose of Ministry of Supply and Ministry of Food cargoes carried, in ships requisitioned or chartered by the Ministry of Shipping.

Ministry of Shipping, 4th July, 1940.