'File 14/115 VII Annex (B 9) Abu Musa oxide: collected background material on the case' [‎44r] (98/1904)

/ 6
3
be no objection to a business transaction such as takes place everywhere unhindered.
That the contract might cause looses to the Company, may indicate that it would
perhaps be possible for the Company to conclude a more favourable contract for them
selves. If this were the case, there would even then be no legal objection to the
contract.
It may be the case that the contract was concluded without the knowledge of
the Sheikh, Meanwhile there is no reason why this contract should have required
the approval of the sheikh, as it was merely a legal and purely business transaction.
It does not appear to be the case that the contract was concluded without the
agreement of one ot the partners of the Company, Isa-bia-Abdul Latit, as the managing
parter Samaye informed Isa's father Abdul Latif, who represented his son in all matters
concerning the Company, at once of the conclusion of the contract, and the latter
approved the contract m his reply (Indosure 6). According to a later letter of the
father, Abdul Latif (lucloau re 8) , Ms son Isa appears to recognize the contract as legally
valid, although he would have liked to have seen it before its conclusion, as he describes
its abrogation simply as " preferable," and in the next letter of Abdul Latif senior
(Inclosure 10) the latter says definitely that he had originally approved the contract on
behalf of his son.
Even if one of the partners desires to attack the validity of the contract of 1906 by
stating that it required his consent, which had not been obtained, yet it is impossible to
see how this gives the Sheikh the right to abrogate by force the lease of 1898 granted
by his uncle Salem.
This would appear, therefore, to be a question of a purely arbitrary, and, from the
legal point of view, absolutely indefensible proceeding on the part of the Sheikh of
ttif> ■l'>acriEgiX!nmpa,ny l ■ ..... .■imriiirn ----min
This illegal action affects directly the German firm R. Wonckhaus and Co. as
partners in the Company, and is not a claim raised by the German firm against the
other partners in the Company.
Their complaint is based on their own rights as partners in the Company, and it
will be the Sheikh's duty to compensate the German partner as well as the other partners
in the Company, who are British subjects, for his illegal action.
TBe losses which have accrued to the Company are very considerable, as they
cannot evade the obligations assumed by them in the above-mentioned contracts
(Inclosures 5 and 19), especially in the contract (Inclosure 5) concluded in 1906 with
the German Herr Wonckhaus, which contract appears to have caused the Sheikh to
commit his act of aggression. Through this contract immediate losses are incurred by
the Company, as they have been prevented by the forcible measures of the Sheikh from
delivering 2,000 tons of iron oxide to Herr Wonckhaus which had already been extracted,
and which ought to have been shipped weeks ago. Further losses will be caused by the
fact that the Company is not in a position to extract at the proper time the quantities
of iron oxide which they must keep ready for the deliveries due in the coming months.
As Herr Wonckhaus, on his side, has already resold the iron oxide to his shipper, and
now in order to fulfil this obligation must buy iron oxide elsewhere at a high price, it
is obvious that the loss accruing to the Company through the counter-claim of Herr
Wonckhaus amounts to a large sum, and will be greatly increased by any further
prevention of the working of the mines.
The imperial Government consider therefore that it is urgently necessary to settle
the matter at once and think that the British Government will agree with them, in view
of the fact that the other partners of the Company, who are suffering equally from (he
arbitrary action of the Sheikh, are British subjects.
In the first place, it will be necessary that the Sheikh of Shargali, in order to avoid
further losses, should, without delay, allow the Company to work the iron oxide mines
On the island of Abu Musa.
Later on it will be necessary to deal with the question of compensation for the
losses suffered by the Company.
It will also be necessary to consider whether the circumstance that armed men of
the Sheikh's tired on employes of Wonckhaus who who wished to land on the island
requires special reparation on the part of the Sheikh. Mr. Thomas Brown, whose life
was seriously endangered, is, as already stated,*a British subject, while the nationality of
the other employe concerned, who describes himself as a German, requires to be
established.
Eterlin, December , 1907.