'F 80 File 82/34 I APOC Concession' [‎220v] (385/436)

the current year this procedure has been followed, and the Persian Government
has, in fact, regularly exercised this right.
20. On the 8th June the Resident Director reported that the Persian
Government had protested regarding the smallness of the provisional royalty
figures for the year 1931 (£306,872 as compared with £1,288,312 in 1930), and
had requested that its representatives should have full facilities to examine the
figures. This was at once agreed. These facilities have always existed and have
consistently been exercised by the Persian Government representatives. Both the
Minister of Court and the Finance Minister had been previously warned that,
owing to the depression in the oil industry, the amount of the royalty for 1931
was bound to be far below that of earlier and more prosperous years.
21. About the same time the Persian Government informed the Company
that it considered the initialled agreement, referred to in paragraph 18 above,
which had been received on the 29th May, needed further interpretation and
editing in more comprehensible language, and requested the Company to send
authorised representatives and experts to Tehran in order to explain the draft
and to re-edit it. The Company replied that it was impossible for the legal or
chief accountancy advisers of the Company to go to Persia at the moment, and
suggested that the Persian Government should send its representatives to London
for a full explanation, since the legal and accountancy advisers of both parties
were available there, as well as all the necessary data. Meanwhile steps were
taken to have the French text of the agreement re-edited by the legal adviser of
the Company in Tehran for the assistance of the Persian Government.
22. On the 29th June the Persian Government refused to accept the
royalty for 1931 payable to it under the terms of the existing agreements, and
on the 7th July the Company learnt from Tehran that the draft royalty
agreement was still under examination, but that tentative proposals to the
Company^ on an entirely different basis were under consideration. The
Company's representative in Tehran was subsequently informed that the Persian
Ministers concerned were preparing a new set of proposals for discussion with
the Company, and on the 16th November the Minister of Finance informed the
Company's representative in Tehran that these proposals were almost complete.
No such proposals have, however, in fact, been communicated to the Company
by the Persian Government.
23. At this stage, therefore, the situation was that, early in the present
year, a preliminary agreement for modifying the existing 'basis (i.e., that
resulting from the agreement of 1920) on which the royalty payable to the
Persian Government was to be calculated had been arrived at between the
Persian Government and the Company and had been approved by the Persian
Council of Ministers; that the formal agreement, which was to give effect to this
preliminary agreement, had been negotiated and initialled by representatives
of the parties and had for some months been under consideration by the Persian
Government. The Persian Government, who appeared to be dissatisfied with
the proposed agreement, had not, in fact, made any alternative proposals to
the Company, though it had informed the Company's representative at Tehran
that such poposals were in course of preparation. The Company would have
been perfectly prepared to consider such proposals on receiving them. Moreover,
should it have ultimately proved impossible for the Persian Government and
the Company to come to an agreement, any claims by the Government against
the Company could, and should, have been submitted to arbitration in accordance
with article 17 of the concession.
24. The Persian Government, however, preferred to adopt another course.
On the 27th November, 1932, the Persian Minister of Finance delivered the
following communication to the Resident Director in Tehran of the Anglo-
Persian Oil Company( 2 ): —
The Anglo-Persian Oil Company has been repeatedly informed by
the Persian Government that the D'Arcy Concession of 1901 does not
protect the interests of the Persian Goovernment and that it is necessary
to place relations between the Imperial Persian Government and the
Company on a new basis which will provide for the real interests of Persia.
The defects and shortcomings of the D'Arcy Concession and its disagree
ment with Persian interests have been repeatedly pointed out, and, of course,
- i eX ^ ^ all communications from the Persian Government quoted in this memorandum
is the English translation as received in Iiondon by telegraph.