Section I. Except as provided in Section III of this Annex and Part III of the present Treaty, a vessel shall not be replaced before it becomes "over-age". A vessel shall be deemed to be "over-age" when the following number of years have elapsed since the date of its completion:

(a) For a surface vessel exceeding 3,000 tons (3,048 metric tons) but not exceeding 10,000 tons (10,160 metric tons) standard displacement:

(i) if laid down before the 1st January, 1920: 16 years;
(ii) if laid down after the 31st December, 1919: 20 years.

(b) For a surface vessel not exceeding 3,000 tons (3,048 metric tons) standard displacement:

(i) if laid down before the 1st January, 1921: 12 years;
(ii) if laid down after the 31st December, 1920: 16 years.

(c) For a submarine: 13 years.

The keels of replacement tonnage shall not be laid down more than three years before the year in which the vessel to be replaced becomes "over-age"; but this period is reduced to two years in the case of any replacement surface vessel not exceeding 3,000 tons (3,048 metric tons) standard displacement.

The right of replacement is not lost by delay in laying down replacement tonnage.

Section II. Except as otherwise provided in the present Treaty, the vessel or vessels, whose retention would cause the maximum tonnage permitted in the category to be exceeded, shall, on the completion or acquisition of replacement tonnage, be disposed of in accordance with Annex II to this Part II.

Section III. In the event of loss or accidental destruction a vessel may be immediately replaced.

The present Treaty provides for the disposal of vessels of war in the following ways:

(i) by scrapping (sinking or breaking up);
(ii) by converting the vessel to a hulk;
(iii) by converting the vessel to target use exclusively;
(iv) by retaining the vessel exclusively for experimental purposes;
(v) by retaining the vessel exclusively for training purposes.

Any vessel of war to be disposed of, other than a capital ship, may either be scrapped or converted to a hulk at the option of the High Contracting Party concerned.

Vessels, other than capital ships, which have been retained for target, experimental or training purposes, shall finally be scrapped or converted to hulks.

(a) A vessel to be disposed of by scrapping, by reason of its replacement, must be rendered incapable of warlike service within six months of the date of the completion of its successor, or of the first of its successors if there are more than one. If, however,