'File 14/115 VII Annex (B 9) Abu Musa oxide: collected background material on the case' [‎113v] (237/1904)

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latter may pass out of his possession, and he may gradually lose the island. Final 7'. ®
points out that he did not give permission for the conclusion of agreements wi
foreigners, and that the lease agreement does not contain any clause under which tne
whole output could be delivered to one individual without his (Sakar s) sanction.
(Annexes 12, 16, 20, 22 of the first German Memorandum and Annex 39 oi this
Memorandum).
In the first place it is not easy to understand how the agreement of the 1st June,
1906, can be regarded as a letting of the mines to Mr. Wonckhaus. The stipulation chat
the oxide is to be delivered free on board, and the detailed arrangements concerning
the quantity to be loaded daily, make it clear that Mr. Wonckhaus was not to have
anything to do with the working of the mines themselves.* The agreement with
Mr. Wonckhaus is a simple contract for delivery, an entirely unobjectionable commercial
transaction such as might take place anywhere without giving rise to comment, and
which was intended to promote purely commercial interests. Even if this agreement
had given to Mr. Wonckhaus for a certain time a position in the nature of a monopoly
as regards the red oxide obtained on Abu Musa, that would not have prevented the
transaction from being a perfectly legitimate one. It is to be observed, however, that
a monopoly in the strict sense of the word was not established, since the company was
at liberty to sell certain quantities to India. Sakar's fear that the agreement may lead
not only to the property in the mines being gradually lost to the owner—whether he is
Salim or Sakar—but even to the separation of the Island of Abu Musa from Shargeh,
is so senseless that it is really not worth while to discuss it.
As regards Sakar's objection to the conclusion of agreements with foreigners, it is
to be observed that the lease agreement concluded between Salim and the company
contains no provision against the sale of the produce of the mines to foreigners. On the
contrary, in view of the freedom of trade recognised in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , and the
absence of an express prohibition in the lease agreement, it may be considered to be
taken for granted that the company of lessees is to be at liberty to conclude arrange
ments for supplying foreigners also. Moreover, in the Memorandum of Association,
with which Sakar had been acquainted for years and which he had approved of, sales to
foreigners were expressly provided for, and such sales were as a matter of fact
repeatedly concluded, without any objection on Sakar's part. His observation in his
letter of the 26th March, 1907 (11 Safer, 1325, Annex 16 of first German Memo
randum) : " We did not tell you to make contracts with strangers from foreign Powers
without informing us," is therefore entirely groundless and misleading.
It is also strange that, as appears from the letter just referred to, Sheikh Sakar
should wish British subjects to be treated differently from those of other Powers. From
the point of view of the Shargeh State a British subject is certainly just as much a
foreigner as is the subject of any other Power. Yet Sheikh Sakar has' uothing to say
against the company of lessees concluding agreements with British subjects, while
agreements with other foreigners are not to be allowed. This is evidently contrary to
the principle of the " open door." .
In the view of the Imperial Government the agreement with Mr. Wonckhaus
neither infringes the terms of Salim's concession, nor is in any way dangerous to the
internal peace, external independence, or territorial integrity of Shargeh. It is there
fore _not apparent how the action of Sakar against the company could be justified by
considerations connected with the welfare of the State. '
The conclusions arrived at above may be summarised as follows
1. Sheikh Salim is owner of the Island of Abu Musa, and therefore, according
to the commercial law prevailing on the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , had a right to lease the oxide
mines there to the mining company, Hassan-ibn-Ali and Co., in his own name
According to the Mohammedan religious law he could not conclude the lease agreement •
according to that law, however, the company would have acquired the exclusive rioht
to the produce of the mines simply by the fact of working them.
2. The owner of the island, whoever he may be, has no authority, either according-
to the lease agreement (which is to be judged by commercial law), or accordina to
religious law, to revoke or terminate the rights of the mining company or to hinder'the
company in any other way from working the mines.
3. Hassan Samaih had authority, as manager of the mining company, to conclude
* The British Memorandum observes that the arrangement between Sheikh Salim and the comnau- w
not really a lease agreement, but " a permit to work these mines." If even that arrangement is not to i f
considered a " leasehold," it is incomprehensible how a simple contract for the delivery of an artiH^ r-,vf
regarded as a 46 leaseholcL ,, u De