VIETNAM MARITIME CODE

Section D: FLOATING INSURANCE

             Article 216

 1.         Floating insurance is a package insurance covering the subject of insurance of a kind or some kinds of cargoes which the assured will be dispatched or receiving in a specified period of time.

2.         In a floating insurance the insurer is bound to issue, on demand of the assured, a policy is bound to issue, on demand of the assured, a policy or a certificate of insurance for each declared shipment or each declared cargo.

           Article 217

 1.         The assured, who has concluded a contract of floating insurance, is bound to notify to the insurer immediately upon receipt of information concerning the dispatch or receipt of the cargo and to specify each case the name of the vessel, the route, the cargo and the amount insured, even when the notice reached the insurer, the cargo may have been dispatched or have arrived at the destination.

2.         Where the assured has willfully or through his gross negligence failed to fulfill the obligation defined in item 1 of this Article, the insurer may rescind the contract, retaining the right to insurance premium to which he would have been entitled had the contract been properly performed by the assured.

           Article 218

          A contract of floating insurance may be terminated by either party subject to a three-month notice.

Section E: PERFORMANCE OF CONTRACT OF MARINE INSURANCE

            Article 219

          Unless otherwise agreed, the assured is bound to pay the premium to the insurer immediately after the conclusion of the contract or the issue of the marine policy.

           Article 220

 1.         The assured is bound to notify to the insurer every information on very material change of perils to which the subject of insurance is exposed or on accidents concerning the subject of insurance, immediately upon receipt of such information, and to follow the insurers instructions thereof.

2.         The insurer has the right to rescind the contract of marine insurance where the assured commits a breach of the provisions set out in item 1 of this Article.

           Article 221

 1.         Where an accident causing loss incidental to the perils insured has occurred, the assured is bound to take all necessary measures available to him for the purpose of averting the loss or lessening its extent as well as to secure indemnity claims against the parties responsible for the loss, when carrying out this obligation, the assured should follow the instruction of the insurer.

2.         When the assured wilfully or through gross negligence has not carried out the obligation set forth in this Article, the insurer is free from liability for losses caused thereby.

           Article 222

          The insurer is bound to refund to the assured all dispensable and reasonable expenses incurred for the purpose of averting the loss or lessening its extent as well as other expenses incurred in accordance with the instruction by the insurer as defined in Article 221 of the present Code, or expenses incurred for ascertaining the character and extent of the loss under the liability of the insurer; and expenses contributed to the general average. These expenses are refunded in such proportion as the amount insured bears to the insurable value.

           Article 223

          Within limit of the amount insured, the insurer is liable for losses resulting directly from the peril insured and is also bound to refund the expenses as defined in Article 222 of the present Code even though the aggregate amount to be paid to the assured may exceed the insured amount.

           Article 224

          The insurer is not liable for losses arising from an intentional fault or a gross negligence of the assured, but the insurer is liable for losses caused by negligence or fault of the master who is also insured in navigation and management of the vessel as well as losses caused by fault of another member of the crew, and or the pilot.

           Article 225

          In the insurance of a vessel and freight, the insurer is not liable for losses arising from:

a)           The vessel being not seaworthy at the beginning of the voyage, unless this is due to latent defects of the vessel or caused by circumstances which could not have been prevented in spite of due diligence being exercised by the assured;
b)          The vessels age or wear and tear in her use;
c)           Loading on board the vessel of explosive or easily inflammable materials or other dangerous cargoes without compliance with provisions obligatorily applicable to the carriage of cargoes of that kind, with the privity of the assured but without the privity of the insurer.

            Article 226

           In the insurance of cargo, the insurer is not liable for losses arising from:

a)           Nature of the cargo;
b)          Ordinary leakage, ordinary wear and tear;
c)           Improper packing of the cargo;
d)          Delay in its supply;

            Article 227

           Unless otherwise agreed in the contract, the insurer is not liable for losses sustained by the subject of insurance arising from war or military activities of any nature and their consequences; from being condemned to appropriate as prize; from civil commotions, strikes or from confiscation, requisition, seizure or destruction of the vessel or cargo according to military orders, and or orders of civil authorities.

            Article 228

           The insurer, where his liability has involved in compensation for losses and damages occurred in the event of a collision, a part from his liability to compensate the assured for loses or damages of the subject  of insurance, is bound to be responsible for loss of or damage to the third party for which the assured is liable even though the aggregate amount of indemnity exceeds the amount insured.

            Article 229

           Where the risks insured occur, the insurer may indemnify the assured the total amount insured against the exemption of all responsibilities as agreed in the contract. The insurer, however, must advise the assured of his intention to do so within a period of seven days from the date on which he has received the information from the assured about occurrence of the risks and their consequences. In the case, the insurer is not entitled to the ownership of the subject of insurance where the amount insured is less than the insured value.

          In addition to the indemnity of the total amount insured, the insurer is also liable for refunding expenses incurred for the purpose of averting the loss or lessening its extent, as well as repairing and recovering the subject of insurance which the assured had paid before he received the advice from the insurer.

            Article 230

 1.         Unless the contract otherwise provides, the insurer is liable for losses resulting from several successive accidents covered by the insurance, even though the aggregate amount of losses may exceed the amount insured.

2.         Where, a total loss of the subject of insurance occurs after a partial damage has already taken place but not yet been made good or compensated the indemnity to the assured shall be limited to his total loss only.

3.         The provisions defined in items 1 and 2 of this Article do not relieve the insurer of liability for refunding the expenses in connection with obligations set out in Article 2221 of the present Code.

Section G: PERFORMANCE OF OBLIGATION FOR INDEMNITY WHEN A THIRD PARTY IS LIABLE FOR LOSSES

            Article 231

           Where he has indemnified the assured, the insurer is entitled to recourse against the third party the liability for loss within the amount paid. The insurer exercises his right in accordance with the provisions defined for the assured.

            Article 232

1.         The assured is bound to provide the insurer with all information, documents as well as proofs and to take necessary measures to enable the insurer to exercise the right to recourse against the third party.

2.         Where the assured does not exercise the obligations defined in item 1 of this Article or he is at fault that makes the insurers right to recourse impractical, the insurer is totally exempted from the payment of indemnity or reduced in proportion.

3.         If the assured has received the indemnity for losses from the third party, the insurer is bound to pay only the difference between the indemnity amount according to the contract of insurance and the amount of money the assured received from the third party.

            Article 233

 1.         The insurer, on demand of the assured, undertakes to pay the expenses contributed to general average within the amount insured.

2.         On establishing the General Average Statement, the assured is bound to pay due attention to the insurers interests.

Section H: ABANDONMENT OF SUBJECT OF INSURANCE

             Article 234

 1.         The assured has the right to declare abandonment of the subject of insurance and surrender to the insurer of his rights and obligations to the subject of insurance against payment of indemnity for total loss where the total loss of the subject of insurance is inevitable, or that averting it would entail expenditure so high in relation to the value of the subject of insurance.

2.         The right to abandonment of the subject of insurance may be applicable where the vessel has been missing, condemned to appropriate, or has met with an accident in consequence of which she has become unfit for repairs, or not worth repairing economically or costs of recovery uneconomical.

3.         The provision of item 2 of this Article is also applied to cargo, even where the costs of its repair and delivery to the place of destination would exceed its market value at the place of destination.

            Article 235

 1.         The assured should declare the abandonment in writing, stating the circumstances which justify the abandonment.

2.         The declaration of abandonment must be given to the insurer in due time, but not later than one hundred and eighty days of the date on which the assured has learned of the circumstances justifying the abandonment, or within sixty days of the date on which the insurance has expired where the vessel or cargo has been taken as prize or where possession of the vessel or cargo has been lost to the assured by other causes. After these periods of time, the assured loses the right to the abandonment but still has the right to demand from the insurer the indemnity for loss.

3.         The abandonment of the subject of insurance is not attached any conditions. Where the abandonment has been accepted, neither the insurer nor the assured can change his decision.

            Article 236

           When declaring the abandonment, the assured is bound to inform the insurer of any real rights encumbering the subject of insurance and of other insurances pertaining to it, as well as of any limitation known to the assured.

            Article 237

 1.         Within the period of thirty days, counting from the date on which he received the declaration of abandonment, the insurer is bound to notify the assured of his acceptance or refusal of the abandonment, the insurer is bound to notify the assured of his acceptance or refusal of the abandonment. The insurer losses the right to refuse to accept the abandonment after the expiration of that period.

2.         The rights and obligations to the subject of insurance pass to the insurer on his making the declaration that he accepts the abandonment. The insurer may not demand these rights and obligations.

3.         Where the notification of abandonment is done as defined but the insurer refuses the acceptance of abandonment, the assured also retains the right to an insurance indemnity.

            Article 238

 1.         In the case of an actual total loss resulting from the missing of the vessel and cargoes carried on board thereof, the assured may demand from the insurer the indemnity for the total amount insured without declaring the abandonment of the subject of insurance as defined in Article 235 of the present Code.

2.         Where the vessel found missing is insured for a definite period of time, the insurer is only liable for the indemnity in case he has last received the information of the vessel before the expiration of the insurance period. The insurer is free from liability where he proves that the vessel has been found missing after the expiry of the insurance period.

            Article 239

           Where the insurer has paid the indemnity, the vessel then escapes from the peril, he is entitled to demand that the assured continue his ownership of the vessel and refund the indemnity paid after deducting the indemnity paid after deducting the indemnified amount for partial loss of the vessel provided that the partial loss arising directly from the peril insured.           

Section I: PAYMENT OF INSURANCE INDEMNITY

             Article 240

           On payment of insurance indemnity, the insurer may demand that the assured provide him with all relevant information, as also submit to him documents and other proofs indispensable for ascertaining the circumstances of the accident as well as the loss and the extent thereof.

CHAPTER XVII

SETTLEMENT OF MARINE DISPUTES

             Article 241

 1.         The parties to maritime contracts may settle their maritime disputes through negotiation, where such a solution proves impossible they may refer the dispute to arbitration or bring it before court.

2.         Maritime disputes will be solved by arbitration or court in accordance with the jurisdiction and rules of procedure determined by laws.

            Article 242

           Where a maritime contract has at least one party being a foreign organization or individual, the contracting parties may agree to refer their disputes to a foreign arbitration or court.

CHAPTER XVIII

FINAL PROVISIONS

             Article 243

           The present Code enters into force on the first day of January, 1991.

            Article 244

           All the previous provisions on maritime shipping activities contrary to the present Code are hereby repealed.

The present Code was approved by the 8 th Legislature of the National Assembly of the Socialist Republic of Vietnam at its 7 th session     on June 30, 1990.

PRESIDENT OF THE NATIONAL ASSEMBLY

LE QUANG DAO