'File 14/115 VII Annex (B 9) Abu Musa oxide: collected background material on the case' [‎114r] (238/1904)

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agreements like that with Mr. W onckhaus, signing in the name of the company, without
cojiSUJumg the other partners. Such agreements at once become binding on the other
paitners, in ix.ie case under consideration, however, their approval was also signified.
, ,ie agreement with Mr. Wonckhaus is advantageous to the mining company, so
that the partners have not been injured by Hassan Samaih's action as manager.
5. 1 here was therefore no reason for a complaint of the company against Hassan
Samaui on the ground of action contrary to agreement or duty.
Ihere was accordingly no ground for action on the part of Sheikh Sakar against
Hassan Samaih for the protection of the other partners. Moreover, the seat of the
company is at Lmgah, and the partners of the company are not subjects of the'Sheikh
of bhargeh, so that he has no jurisdiction in matters concerning the relations of the
partners with each other. ^ In any case, he could not exercise such jurisdiction himself,
but should have had the dispute settled bv the judge.
1 7* ' i ^ e agreement between the mining company and Mr. Wonckhaus, which is
nothing but the conclusion of an ordinary and permissible business transaction, and
which cannot have any political aims, neither infringes the lease agreement nor is in any
way dangerous to the interests of the State of Shargeh, so that the action taken by
Sheikh Sakar against the company cannot be justified on the ground of the general
interests of the administration of the countrv.
8. Sheikh Sakar's interference is not limited to redressing a wrong alleged to have
been done by one partner to the others, or to preventing the carrying out of an agree-
ment alleged to be contrary to the interests of the country, but simply deprives the
whole company of the basis of its existence.
The company, in which the German firm of Robert Wonckhaus and Co. have a
share, ^is thereby^ very seriously injured, since the realisation of its object is made
impossible and it is not in a position to carry out current obligations imposed upon it by
contract.
y. Sakar's proceedings, then, are clearly a violation of law—an exercise of arbitrary
power.
xne British Memorandum maintains that, as Hassan Samaih had no authority to
conclude a contract for the delivery of oxide with Mr. Wonckhaus which would be binding
on the company, it is open to Mr. Wonckhaus to claim compensation from Hassan Samaih
for non-fulfilment of the contract. There can, however, be no doubt, after what has
been stated in tne present Memorandum, that the responsibility for carrying out the
contract for the supply of oxide rests, not with Hassan Samaih personally, but with the
company as a company. The fulfilment of the contract by the company has, however,
up till now been prevented by the arbitrary act of Sheikh Sakar, and the lawless
state of things brought about by that act.
In consequence of the conclusion of this contract by Mr. Wonckhaus, acting in the
interests of the firm of R, Wonckhaus and Co., this latter firm at the present time still
lias a substantial interest in the existence and prosperity of the mining company.
When the disputes of the company with Sheikh Sakar placed the firm in a difficult
position, it was only doing what was necessary in the defence of its legitimate interests
when it endeavoured to acquire a share in the company, and so to exercise a direct
influence on the fortunes of the latter. There was no reason why the illegal interference
of the sheikh should prevent the firm from acting as it thought fit.
1 he attempt is made in the British Memorandum to show that the firm of
W bnckiiaus has no locus standi in this dispute, on the ground that it either acquired its
share in ignorance of the position of affairs, in which case it must address its claim to
the vendor, or else acted with knowledge of the position, and has consequentlv itself
to blame for the injury it has sustained. This line of argument starts from the
erroneous assumption that the lease agreement is no longer legally valid. If that
were the ease, there would doubtless be no foundation for the present complaint.
But as the dispute turns upon the question whether the cancelling of the lease agree
ment was legal or illegal, and as the Imperial Government, for the reasons stated in
this Memorandum, are convinced of the illegality of the cancelling of the agreement-
there does not appear to be any reason why the firm of Wonckhaus should be pre
vented from putting forward, on the strength of the share acquired by it in the company^
its claims m respect of expropriation. The firm seems to be the more justified in doing
so from the circumstance that it was evidently the aim of Sheikh Sakar's action
throughout to render the rights enjoyed by Mr. Wonckhaus under the agreement for
the supply of oxide illusory for the benefit of his competitors.
Sheikh Sakar compelled by force of arms the cessation of the working of the oxide