'File 14/115 VII Annex (B 9) Abu Musa oxide: collected background material on the case' [‎59r] (128/1904)

[This PocnmBntis the Property oi Ife Britannia Majesty's Govemmeat.]
[B]
ASIATIC TURKEY AND ARABIA.
CONFIDENTIAL.
[294] No. 1.
Foreign Office to India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. .
_ Foreign Office, Novemher 8, 1910-
\\ ^ erence ln y letter, marked immediate, of the 25t!i January last, I am
dnected by Secretary Sir E. Grey to state, for tlie information of the Secretary of State
1( ^ L l n dia, that ne has nad under consideration the second memorandum of the
(reiman tToyemment, enclosed in a note dated the 4th December, 1909, from the
German Ambassador, on the subject of the cancellation of the red oxide concession at
Abu Musa.
Sir jl . Grey has always intended to postpone detailed criticism of the German
case until after careful local enquiries have been made reg*arding the new and
important evidence now brought forward by the German Government: in view, however,
of the fact that the British resident in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. has been unable, as stated in
ins telegram of the 2/th September, to make satisfactory progress in the collection of
evidence, and inasmuch as the question of delay cannot fail to have an important
bearing upon the amount of compensation which may be payable as damages,-—a period
of nine months having already elapsed since the date of my letter of the 25th
January, Sir E. Grey considers that it may be expedient to lay before the Earl of
Crewe certain observations in regard to a possible settlement of the question in
dispute.
Sir E. Grey does not now propose to review the circumstances which led up to the
cancellation of the lease by the Sheikh of Shargah : but he considers, for reasons
which are fully set forth in printed minutes of w r hich copies were furnished to your
department in the month of February last, that His Majesty's Government might safely
make an offer to the German Government to give Messrs, Woenckhaus and Co. the
samb position that they held under their contract of June 1906 commercially, if means
can be devised that will safeguard British political interests.
He further considers that Messrs. Woenckhaus' claim is valid in so far as it
relates to the loss sustained in consequence of Hassan Samaiyeh's breach of contract
to sell the output of the oxide mines at a fixed price per ton ; this breach of contract
is due to the cancellation of the concession by the Sheikh of Shargah ; and the German
Government have apparently full knowledge that the sheikh acted with the approval,
and indeed at the instigation of His Majesty's Government.
In these circumstances Sir E. Grey is disposed to think that proposals to the
German Government on the following lines might possibly meet the requirements of
the situation ; but, inasmuch as the Government of India is primarily concerned, more
especially in regard to the payment of compensation, these proposals are of course
subject to the ultimate decision of Lord Crewe :—
-1; Ihe Sneikh of Shargah to grant a new concession to Hassan Samaiyeh and
Abdul Latif (the son of the former, Abdulla ben Hassan being excluded for personal
reasons urged by Colonel Cox) of oxide mining rights on Abu Musa, so as to enable
them to carry out their contract with Messrs. Woenckhaus,
2. The amount of damages suffered by Messrs. Woenckhaus through the inter
ruption of the contract to be referred to some British tribunal, and the amount to be
x >aid through His Majesty's Government on behalf of the Government of India.
In order to safeguard the Sheikh of Shargah, the new T concession under 1 would
have to provide that no share in the enterprise w^as to be transferred to another person
without the sheikh's consent, and should also give him access to the books of the
company and control over the working of the mines: the partners in the previous
concession, xip to the date of its cancellation, being all British subjects, it could
fairly be claimed that the terms of the new concession do not affect the German
Government, who are merely concerned with the execution of Messrs. Woenckhaus'
contract.
[2988 h—1]
[November 8.]
Section L