Section 7.- ABANDONMENT OF SUBJECTS OF INSURANCE

Article 250.- The right to abandon the subjects of insurance
1. The assured shall have the right to abandon the subject of insurance and surrender to the insurer of his/her rights and obligations related to the subject of insurance in return for the payment of the indemnity for total loss where the total loss of the subject of insurance is inevitable, or the aversion of such loss would entail expenditure so high in comparison with the value of the subject of insurance.
2. The right to abandon the subject of insurance may be applicable where the seagoing vessel has been sunk, appropriated or damaged in an accident in consequence of which it has become irreparable, or its cost of repair, recovery or redemption is economically inefficient.
3. The right to abandon the subject of insurance provided for in Clause 2 of this Article shall be also applied to cargo, even where the costs of its repair and delivery to the port of delivery would be so high in comparison with its market value at the port of delivery.

Article 251.- The mode and time limit for exercising the right to abandon the subjects of insurance
1. The exercise of the right to abandon the subject of insurance must be declared in writing, stating the grounds for the application of this right.
2. The declaration of the abandonment of the subject of insurance must be sent to the insurer within a reasonable time limit but not exceeding one hundred and eighty days, counting from the date on which the assured has learned of the circumstances used as grounds for the application of this right or within sixty days, counting from the date on which the insurance has expired in cases where the seagoing vessel or cargo has been appropriated or where the right to possession of the vessel or cargo has been lost for other reasons; after the time limit specified in this Clause, the assured shall lose the right to abandon the subject of insurance but shall still have the right to claim the indemnity for the loss.
3. The abandonment of the subject of insurance must be unconditional; if the abandonment has been accepted, neither the insurer nor the assured can change his/her decision.

Article 252.-The assured’s obligations when declaring the abandonment of the subject of insurance
When declaring the abandonment of the subject of insurance, the assured shall be obliged to provide the insurer with information on any proprietary rights related to the subject of insurance and on other insurance amounts and limitations known to the assured.

Article 253.- The time limit for the insurer to accept or refuse to accept the abandonment of the subject of insurance
1. Within thirty days, counting from the date of receipt of the declaration of abandonment of the subject of insurance, the insurer shall be obliged to notify in writing the assured of his/her acceptance or refusal of the abandonment. The insurer shall lose the right to refuse to accept the abandonment after the expiration of this time limit.
2. The rights and obligations related to the subject of insurance shall be transferred to the insurer immediately after he/she notifies that he/she accepts the abandonment; the insurer may not demand these rights.
3. Where the declaration of abandonment of the subject of insurance has been effected as provided for but the insurer refuses to accept the abandonment, the assured shall still retain the right to an indemnity.

Article 254.- Indemnity for total loss
1. A constructive total loss means loss resulting from the damage to the seagoing vessel or cargo whose actual total loss is deemed to be unavoidable or the cost of repairing or recovering the seagoing vessel would exceed the value of the vessel when repaired or exceed the market value of the cargo at the port of delivery; in this case, the assured must send the declaration of abandonment of the subject of insurance to the insurer before demanding the payment of the insured sum.
2. Actual total loss means loss resulting from the total destruction or damage of the seagoing vessel or cargo which renders the vessel or cargo unrecoverable or from the missing of the vessel together with the cargo on board thereof; in this case, the assured may demand from the insurer sum without having to declare abandonment of the subject of insurance.
3. Where the vessel found missing has been insured for a definite period of time, the insurer shall only be liable for the indemnity if he/she has last received the information of the vessel before the expiration of the insurance period. The insurer shall not be liable for the indemnity if he/she proves that the vessel has been found missing after the expiration of the insurance period.

Article 255.- Refund of indemnified amounts
Where the insurer has paid the indemnity, the seagoing vessel then escapes from the maritime peril, he/she shall be entitled to request the assured to continue his/her ownership of the seagoing vessel and refund the indemnity paid after deducting the indemnified amount for partial loss of the seagoing vessel provided that such partial loss is the direct consequence of the maritime peril insured.