'File 14/115 VII Annex (B 9) Abu Musa oxide: collected background material on the case' [‎64v] (139/1904)

Phase III,— British Reply to German 10, 1908.
In reply to the German claim we contended:—
Issue [a) .—That the mines were not the private property of Saiim, nor had he
leased them in his own right of private owner, but in his capacity as regent.
Issue (b). —We agreed that the concession, or permit, was approved by the ruling
sheikh, but maintained that it was terminable by either side, and that Sheikh Sagar,
as ruling Sheikh of Sbargah, was, in such a matter, a law unto himselt and was within
his rights in putting an end to the concession.
Issue (c).—As to the subsidiary contract of sale given to W onckhaus, we contended
that Hassan's authority did not cover the grant of such an instrument ano that, as
the primary ground for Wonckhaus's claim was the failure oL Hassan to fulfil his
engagements, the obvious remedy of the German firm was an action at law against the
vendors.
Issu e {d). —We produced evidence to show that Esa, when he knew the whole
terms of the subsidiary contract granted to Hassan (and found that it gave a monopoly),
did not approve of it, and was justified in the course he took.
Issue (e)--—We refused to admit Wonckhaus's as a partner in the
original concession, as he had no share in it at the time of its cancellation and the
colourable acquisition of one afterwards for the purposes of this case could not be
recognised as hond fide.
■ It is to be noted that in framing our reply on the above lines His Majesty's
Government did not make use of the " monopoly" argument as Esa and the sheikh
had, and I was warned to that effect. I did not understand our reason for dropping
this argument at the time, but I now see tnat it was then heid that tnat argument
would be inconsistent with our contemporaneous endeavour to obtain a monopoly or
the Or muz oxide for a British firm. 1 venture, with much respect,, to hope that the
position as regards this point will be reconsidered. Can the fact that the ci\ilised
Government of Persia happen to deal in monopolies and that British and other foreign
subjects are entitled to benefit by the fact be fairly adduced as a reason for precluding
the primitive sheikhs of the Trucial Coast A name used by Britain from the nineteenth century to 1971 to refer to the present-day United Arab Emirates. from safeguarding their interests by refusing
habitually to grant monopolies except under the advice of the protecting Power ?
These ignorant Arab sheikhs would get themselves into hopeless difficulties if not
looked after in such matters.
Phase IV.— German Rejoinder, 3, 1910.
Referring to the same main issues the German Government now make rejoinder on
the following lines :—
Issue (a).—They produce evidence which they consider supports the contention
that Salim granted the original concession in his own absolute right as formal owner,
not only of the mines and other property in the island, but of the island itself.
As an alternative they claim that even if it be possible to doubt Salim's formal
ownership of the island, he is proved to have exercised the full right of disposal
of the usufruct, just like an owner, both with and against t h e consent of the ruling
sheikh.
Issue (h). —That the original concession was approved by the ruling sheikh we
have always conceded. What we contended was that he was justified in cancelling it.
The German reply again presses the argument that the ruling- sheikh (or the owner of
the island, whoever he may be) had no power either according to the terms of the
lease, or according to religious or commercial law, to revoke the mining rights of the
concessionnaires ; that they were in fact irrevocable. Also, from the administrative
point of view, they contend"that the sheikh's action had no justification.
Issue (c).—As regards the subsidiary contract, they argue that there is no valid
reason for any action at law by Wonckhaus against the vendors, for no action of the
latter has been harmful to Messrs. Wonckhaus; it is simply Sheikh's Sagar's action
which has injured them. They claim that the Memorandum of Association drawn up
gave Hassan full authority for all he did.
Issue id). —They produce evidence in support of the contention that the third
partner, Esa, approved the contract to Wonckhaus.
Issue (e). —As to the colourable transfer of a share in the original concession by
Hassan to Brown, and Brown to Wonckhaus and Co., they say very little. They