This memorandum sets out certain interpretations of the provisions of the Agreement of May 28, 1947, regarding settlement for lend-lease, reciprocal aid, surplus property, military relief and claims whereunder the Netherlands Government agrees to assume, process and discharge various maritime claims against the United States Government which were worked out in the practical operation of the Agreement and certain arrangements which have been made for facilitating its operation. It is agreed as follows:

1. All claims against the United States Government which the Netherlands Government is obligated by the Agreement of May 28, 1947 to defend or discharge, including those claims which are now the subject of litigation in courts of the United States, will be processed and defended by officers or attorneys of the Netherlands Government with the exception of the claims arising out of the collision between s.s. „Afrikander” and s.s. „Palembang” on January 11, 1942.

2. The United States Government will refer to the Netherlands Government for prosecution, collection or settlement its affirmative claims against Netherlands nationals arising out of any maritime incident or incidents which gave rise to a claim against the United States Government referred to and assumed by the Netherlands Government pursuant to the Agreement of May 28, 1947, except the claim of the United States Government arising out of the „Afrikander”—„Palembang” collision mentioned above.

3. Except in the „Afrikander”—„Palembang” case, the Netherlands Government may settle, satisfy or discharge claims against the United States Government handled pursuant to this understanding by making a net payment to the private interest involved representing the net ultimate liability of the United States Government in the premises as fixed by judgment, decree or settlement, and may offset the affirmative claims of the United States Government arising out of the same incidents as gave rise to the liabilities of the United States Government without accountability to the United States Government.

4. In consideration of the foregoing concession by the United States Government with respect to the use of other affirmative claims as offsets against its liabilities assumed by the Netherlands Government, the claims arising out of the „Afrikander”—„Palembang” collision now the subject of litigation pending in the United States District Court for the Southern District of New York shall be handled specially pursuant to the following understandings:

(a) The United States Government, acting through the appropriate United States Attorney, will continue to handle the litigation arising out of that collision and will defend the claims asserted against it for the damages sustained by the „Palembang” and her cargo which constitute claims assumed by the Netherlands Government in the Agreement of May 28, 1947.

(b) The United States Government will also prosecute through its attorney its claims arising out of the collision, including its rights to indemnity with respect to liability against the „Palembang” and those interested in her and against s.s. „Davila”, a vessel claimed to have embarrassed the navigation of the „Palembang” in a manner contributing to the collision and those interested in her.

(c) The Netherlands Government agrees that any amount which the „Palembang” interests may be entitled to recover from or offset against claims of the United States Government as a result of a decree of the Court in the litigation, or, with the Netherlands Government's consent, a settlement of the litigation, will be for its account and that it will discharge any such claims recoverable from the United States Government or reimburse the United States Government for the amount of any such claims offset against the claim of the United States Government in the premises, or both.

(d) By way of clarification, this understanding will be applied to the various possible results of the litigation as follows:

(1) In the event the „Afrikander” is held to have been solely at fault the Netherlands Government will satisfy the decree obtained by the owners of the „Palembang” against the United States Government.

(2) In the event the „Afrikander” and the „Palembang” are held to have been mutually at fault and the „Davila” exonerated, the Netherlands Government will pay the moiety of the damages of the „Palembang” which the owners would then be entitled to recover or set off against the claim of the United States Government.

(3) In the event that the „Afrikander”, the „Palembang” and the „Davila” are all held to have been at fault, the Netherlands Government will pay the one third of the damages of the „Palembang” which those interested in her can recover or set off against the claim of the United States Government.

(4) In the event the „Afrikander” is exonerated, there will be no claim against the United States Government which the Netherlands Government will be obligated to satisfy.

The United States Government agrees to furnish the Netherlands Government such acquittances with respect to its affirmative claims in cases other than those arising out of the „Afrikander”—„Palembang” collision as the Netherlands Government may reasonably require to enable it to settle or discharge the net ultimate liability of the United States Government in the premises.

Annexed hereto is a list of claims now being processed in the United States of America which are to be handled pursuant to this memorandum. This list comprises all such pending claims against the United States Government which the Netherlands Government is to assume pursuant to the War Accounts Settlement Agreement of May 28, 1947 now known to the respective Governments, but the annexing of this list does not preclude the handling, pursuant to this memorandum, of other claims subject to that agreement which are discovered or processed hereafter. Such other claims may be included among the claims to which this memorandum applies, without the necessity of any formalized supplementary agreement.

Open Assumption Cases

Assumption cases which have not been disposed of:

(1) „Afrikander”—„Palembang”—„Davila”

Collision January 11, 1942.

The „Afrikander” was U.S. owned and operated and sustained damage put forward at $ 600,000 but probably not provable for as much as $ 500,000. The „Palembang” was operated by a private Dutch national and sustained damage put forward at $ 200,000. Claim is asserted that a privately owned ship „Davila” embarrassed the „Palembang” 's navigation and in a way contributed to the collision. She is a party to the proceedings although sustained no damage.

Under the Memorandum this litigation will be continued and the Dutch Government will agree to pay any sums which the owners of the „Palembang” may recover against the United States or which they may be entitled to offset against the claim of the „Afrikander” in the event of a mutual fault decision.

(2) „Antietam”—„Julietta”

Colission April 14, 1944.

The „Antietam” was U.S. Government owned and operated; she sustained damage estimated at $ 200. The „Julietta” was owned by a Dutch national and under requisition to the Netherlands Government; she sustained damages estimated at $ 7,000.

(3) „Felix Grundy”

Damage to wooden bollards March 23, 1946.

This was a claim for damage to Dutch shore structures which was taken over by the Netherlands Government. Under the Memorandum the Netherlands Government will discharge any liability of the United States.

(4) „Herbert L. Pratt”—„Marsella”

Collision December 20, 1945.

The „Pratt” was U.S. Government owned and operated. The „Marsella” was under requisition charter to the Dutch Government, but the charter provided that she should be operated for the ultimate account of a private Dutch Curacao corporation. The „Pratt” sustained no damage; the „Marsella” 's damages were put forward at $ 1,100.