'F 80 File 82/34 I APOC Concession' [‎221r] (386/436)

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I
the Persian Government cannot legally and logically consider itself bound
to the provisions of a concession which was granted prior to the establish
ment of a constitutional regime in view of the manner in which such
concession was obtained and granted at that time. However, the Persian
Government, in the hope that the Company would take into consideration
the needs of the time and the present position of Persia, and secure her
interests in accordance with those needs, has so far refrained from exercising
its rights to cancel the D'Arcy Concession. Unfortunately, in the face of
the patience displayed by the Persian Government, the Company not only
took no practical steps to protect the interests of Persia, but the more the
Company's expansion increased the more Persian interests were endangered.
Therefore, the Persian Government has lost hope of achieving the object
in view by means of negotiations with the Company, and therefore the only
way to safeguard its rights is by a cancellation of the D'Arcy Concession,
and this Ministry, in accordance with the decision of the Persian Govern
ment, has to notify you that as from this date it has cancelled the D'Arcy
Concession and will consider it void. At the same time, as the Persian
Government has no other intention except to safeguard Persian interests,
should the Anglo-Persian Oil Company be prepared, contrary to the past,
to safeguard Persian interests, in accordance with the views of the Persian
Government, on the basis of equity and justice, with the necessary security
for safeguarding those interests, the Persian Government will not, in
principle, refuse to grant a new concession to that Company."
25. On the 28th November, 1932, the resident director in Tehran of the
Company sent the following reply to the above communication: —
"I have by telegram submitted to the directors of the Anglo-Persian
Oil Company in London the text of your Excellency's letter dated the
27th November. I am instructed respectfully to inform your Excellency
that the Company does not admit that the terms of the D'Arcy Concession
do not protect the interests of the Persian Government, nor do they admit
that, even if that were the case, the Government has the right to cancel
the concession. I may remind your Excellency that the validity of the
D'Arcy Concession has been recognised by successive Persian Governments
before and after the establishment of the constitutional regime, not only by
acceptance for many years of the royalty provided for therein, but also in
many other ways. You will understand that the Company cannot recognise
the right claimed by the Persian Government to cancel the agreement, such
contention having no foundation either in law or in equity. I am instructed
to remind your Excellency that, relying upon the good faith of the Persian
Government and the rights conferred upon the Company by the concession,
the Company has expended in Persia many millions of pounds sterling.
The benefits received by the Persian Government from this expenditure
cannot be ignored in considering whether the terms of the concession are
fair to the Government, nor can they be ignored in any discussions between
the Government and the Company which are to be based on equity and
justice. The Company takes the strongest exception to the statements m
your Excellency's letter that the Company has failed to take into considera
tion the needs of the time and the present position of the Persian Govern
ment. The Company has at all times shown itself willing by friendly
negotiations to endeavour to meet the views and the needs of the Persian
Government, and so far as accord has not been reached the failure has
certainly not been due to any want of effort or goodwill on the part of the
Company The Company must point out that the publication of the
Government announcement in the press will have most damaging reper
cussions on the Company's business, and the directors venture to hope that
on further consideration the Government will immediately withdraw this
announcement.''
26. On the 30th November or the 1st December, 1932, the Minister of
Finance replied in the following terms :
" In reply to your letter of the 29th November, I deem it necessary to
state that the Persian Government does not admit the statements and reasons
as mentioned in the said letter, and considers itself entitled, with sufficient