in Turkish territory on the coming into force of the present Treaty (with the exception of Turkish companies controlled by Allied groups or nationals) on the one hand, and the Governments of the Allied Powers or their nationals who were not on August 1, 1914, Turkish nationals or (except in the case of foreign officials in the Turkish service, in regard to their salaries, pensions or official remuneration) resident or carrying on business in Turkish territory, on the other hand, which were payable before the war, or became payable during the war and arose out of transactions or contracts of which the total or partial execution was suspended on account of the war, shall be paid or credited in the currency of such one of the Allied Powers, their colonies or protectorates, or the British Dominions or India, as may be concerned. If a debt was payable in some other currency the conversion shall be effected at the pre-war rate of exchange.

For the purpose of this provision the pre-war rate of exchange shall be defined as the average cable transfer rate prevailing in the Allied country concerned during the month immediately preceding the outbreak of war between the said country and Turkey.

If a contract provides for a fixed rate of exchange governing the conversion of the currency in which the debt is stated into the currency of the Allied Power concerned, then the above provisions concerning the rate of exchange shall not apply.

The proceeds of liquidation of enemy property, rights and interests and the cash assets of enemies, referred to in this Section, shall also be accounted for in the currency and at the rate of exchange provided for above.

The provisions of this Article regarding the rate of exchange shall not affect debts due to or from persons resident in territories detached from Turkey in accordance with the present Treaty.

ARTICLE 303.

The provisions of Articles 287 to 302 apply to industrial, literary and artistic property which has been or may be dealt with in the liquidation of property, rights, interests, companies or businesses under war legislation by the Allied Powers, or in accordance with the stipulations of the present Treaty.

SECTION V.-CONTRACTS, PRESCRIPTIONS, JUDGMENTS.

ARTICLE 304.

Subject to the exceptions and special rules with regard to particular contracts or classes of contracts contained in the Annex hereto, any contract concluded between enemies will be maintained or dissolved according to the law of the Allied Power of which the party who was not a Turkish subject on August 1, 1914, is a national, and on the conditions prescribed by that law.

ARTICLE 305.

All periods of prescription or limitation of right of action, whether they began to run before or after the outbreak of war, shall be treated

in the territory of the High Contracting Parties, so far as regards relations between enemies, as having been suspended from October 29, 1914, till the coming into force of the present Treaty. They shall begin to run again at earliest three months after the coming into force of the present Treaty. This provision shall apply to the period prescribed for the presentation of interest or dividend coupons or for the presentation for repayment of securities drawn for repayment or repayable on any other ground.

Having regard to the provisions of the law of Japan, neither the present Article nor Article 304 nor the Annex hereto shall apply to contracts made between Japanese nationals and Turkish nationals.

ARTICLE 306.

As between enemies no negotiable instrument made before the war shall be deemed to have become invalid by reason only of failure within the required time to present the instrument for acceptance or payment, or to give notice of non-acceptance or non-payment of drawers or endorsers, or to protest the instrument, nor by reason of failure to complete any formality during the war.

Where the period within which a negotiable instrument should have been presented for acceptance or for payment, or within which notice of non-acceptance or non-payment should have been given to the drawer or endorser, or within which the instrument should have been protested, has elapsed during the war, and the party who should have presented or protested the instrument or have given notice of non-acceptance or non-payment has failed to do so during the war, a period of not less than three months from the coming into force of the present Treaty shall be allowed within which presentation, notice of non-acceptance or non-payment or protest may be made.

ARTICLE 307.

Judgments given or measures of execution ordered during the war by any Turkish judicial or administrative authority against or prejudicially affecting the interests of a person who was at the time a national of an Allied Power or against or affecting the interests of a company in which such an Allied national was interested shall be subject to revision, on the application of that national, by the Arbitral Commission provided for in Article 287. Where such a course is equitable and possible the parties shall be replaced in the situation which they occupied before the judgment was given or the measure of execution ordered by the Turkish authority. Where that is. not possible, the national of an Allied Power who has suffered prejudice by the judgment or measure of execution shall be entitled to recover such compensation as the Arbitral Commission may consider equitable, such compensation to be paid by the Turkish Government.

Where a contract has been dissolved by reason either of failure on the part of either party to carry out its provisions or of the exercise of a right stipulated in the contract itself the party prejudiced may apply to the Arbitral Commission. This Commission may grant compensation to the prejudiced party, or may order the restoration of any rights in Turkey which have been prejudiced by

the dissolution wherever, having regard to the circumstances of the case, such restoration is equitable and possible.

Turkey shall compensate any third party who may be prejudiced by any restitution or restoration effected in accordance with the provisions of this Article.

ARTICLE 308.

All questions relating to contracts concluded before the coming into force of the present Treaty between persons who were or have become nationals of the Allied Powers or of the new States whose tent to decide, shall be recognised in Turkey as final, and shall be decided by the national Courts or the consular Courts of the Allied Power or new State of which one of the parties to the contract is a national, to the exclusion of the Turkish Courts.

ARTICLE 309.

Judgments given by the national or consular Courts of an Allied Power or new State whose territory is detached from Turkey, or orders made by the Arbitral Commission provided for in Article 287, in all cases which, under the present Treaty, they are competent to decide, shall be recognized in Turkey as final, and shall be enforced without it being necessary to have them declared executory.

ANNEX.

I. GENERAL PROVISIONS.

1.

Within the meaning of Articles 304 to 306 and of the provisions of this Annex, the parties to a contract shall be regarded as enemies when trading between them became impossible in fact, or was prohibited by or otherwise became unlawful under laws, orders or regulations to which one of those parties was subject. They shall be deemed to have become enemies from the date when such trading became impossible in fact or was prohibited or otherwise became unlawful.

2.

The following classes of contracts remain in force subject to the application of domestic laws, orders or regulations made during the war by the Allied Powers and subject to the terms of the contracts:

(a) Contracts having for their object the transfer of estates or of real or personal property, where the property therein had passed or the object had been delivered before the parties became enemies; (b) Leases and agreements for leases of land and houses; (c) Contracts of mortgage, pledge, or lien;

(d) Contracts between individuals or companies and the State, provinces, municipalities, or other similar juridical persons charged with administrative functions, and concessions granted by the State, provinces, municipalities, or other similar juridical persons charged

with administrative functions, subject however to any special provisions relating to concessions laid down in the present Treaty.

When the execution of the contracts thus kept alive would, owing to the alteration of economic conditions, cause one of the parties substantial prejudice, the Arbitral Commission provided for in Article 287 shall be empowered, on the request of the prejudiced party, to grant to him equitable compensation by way of reparation.

II. PROVISIONS RELATING TO CERTAIN CLASSES OF CONTRACTS.

Stock Exchange and Commercial Exchange Contracts.

3.

(a) Rules made during the war by any recognised Exchange or Commercial Association providing for the closure of contracts entered into before the war by an enemy are confirmed by the High Contracting Parties, as also any action taken thereunder, provided: (i) that the contract was expressed to be made subject to the rules of the Exchange or Association in question;

(ii) that the rules applied to all persons concerned;

(iii) that the conditions attaching to the closure were fair and reasonable.

(b) The closure of contracts relating to cotton "futures" which were closed as on July 31, 1914, under the decision of the Liverpool Cotton Association, is also confirmed.

Security.

4.

The sale of a security held for an unpaid debt owing by an enemy shall be deemed to have been valid irrespective of notice to the owner if the creditor acted in good faith and with reasonable care and prudence, and no claim by the debtor on the ground of such sale shall be admitted.

Negotiable Instruments.

5.

If a person has either before or during the war become liable upon a negotiable instrument in accordance with an undertaking given to him by a person who has subsequently become an enemy, the latter shall remain liable to indemnify the former in respect of his liability, notwithstanding the outbreak of war.

III. CONTRACTS OF INSURANCE.

6.

The provisions of the following paragraphs shall apply only to insurance and reinsurance contracts between Turkish nationals and nationals of the Allied Powers in the case of which trading with

Turkey has been prohibited. These provisions shall not apply to contracts between Turkish nationals and companies or individuals, even if nationals of the Allied Powers, established in territory detached from Turkey under the present Treaty.

In cases where the provisions of the following paragraphs do not apply, contracts of insurance and reinsurance shall be subject to the provisions of Article 304.

Fire Insurance.

7.

Contracts for the insurance of property against fire entered into by a person interested in such property with another person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war, or by the fact of the person becoming an enemy, or on account of the failure during the war and for a period of three months thereafter to perform his obligations under the contract, but they shall be dissolved at the date when the annual premium becomes payable for the first time after the expiration of a period of three months after the coming into force of the present Treaty.

A settlement shall be effected of unpaid premiums which became due during the war, or of claims for losses which occurred during the war.

8.

Where by administrative or legislative action an insurance against fire effected before the war has been transferred during the war from the original to another insurer, the transfer will be recognised and the liability of the original insurer will be deemed to have ceased as from the date of the transfer. The original insurer will, however, be entitled to receive on demand full information as to the terms of the transfer, and if it should appear that these terms were not equitable, they shall be amended so far as may be necessary to render them equitable.

Furthermore, the insured shall, subject to the concurrence of the original insurer, be entitled to retransfer the contract to the original insurer as from the date of the demand.

Life Insurance.

9.

Contracts of life insurance entered into between an insurer and a person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war or by the fact of the person becoming an enemy.

Any sum which during the war became due upon a contract deemed not to have been dissolved under the preceding provision shall be recoverable after the war with the addition of interest at 5 per cent. per annum from the date of its becoming due up to the day of payment.