File 3877/1912 Pt 4 ‘Turkey in Asia: oil concessions’ [‎39r] (19/176)

[This Document is the Property of His Britannic Majesty’s Government.]
TURKEY.
CONFIDENTIAL.
%
[29859]
No. 1.
[July 18.]
Section 1.
Foreign Office to Messrs. Treheme, Higgins, and Co.
(Confidential.)
Gentlemen, Foreign Office, July 18, 1914.
SECRETARY SIR E. GREY has, in view of the circumstances explained in
your letters of the 23rd ultimo and the 1st instant, fully reconsidered the claims of
your client, Mr. Silley, in respect of oilfields in Mesopotamia, with every desire to
support them so far as possible, but the result has been to convince him that Mr. Silley
has no rights to oil claims in the vilayets of Mosul and Bagdad which it would be
possible for him to make the subject of diplomatic representations to the Sublime
Porte.
Five of Mr. Silley’s claims in those vilayets are based on applications to the
Ministry of Mines made by Ottoman subjects for prospecting licences; Mr. Silley’s
contention is that under the Turkish law such an applicant is entitled as of right to
the issue of a licence.
If Air. Silley’s option over the interests of these Ottoman subjects was acquired
after the date on which the Ministry of Mines refused to issue the licences, he
obviously acquired nothing more than an interest in certain claims of Ottoman subjects
against their own Government; such a possession gives Sir E. Grey no locus standi to
make diplomatic representations. When such representations are made it must always
be borne in mind that the subject about which they are made may require to be
referred to arbitration, and if the claims of a British subject acquired in the above way
were referred to arbitration between Great Britain and the Ottoman Government, the
arbitration could only end in the dismissal of the claim. It is a well settled rule of
international law that, in order to justify the submission to arbitration of a claim by
one Power against another, it must be the claim of a national of the former Power
from the time at which the claim arose, and the mere transfer of an interest in a claim
from the national of one Power to the national of another gives the Government of the
latter Power no right to take up the claim diplomatically and to bring it before an
arbitration tribunal. The precedents bearing on this point will be found enumerated
and discussed at length in the award of the umpire in the Stevenson case, which was
referred to arbitration before the Anglo-Venezuelan Alixed Commission at Caracas in
1903. If, therefore, Air. Silley obtained his option over the interests of these Ottoman
subjects after the refusal of the prospecting licences in the five cases under discussion.
Sir E. Grey is not in a position to make diplomatic representations on his behalf. A
reference is made in your letter of the 1 st instant to the foreign interests in the
Turkish Petroleum Company, and it is sought to treat Sir E. Grey’s support of the
interests of that company, in which no doubt there are foreign shareholders, as parallel
with the support which it is desired to obtain for the interests which Air. Silley has
acquired from his Ottoman associates. In reality the cases are not at all analogous.
The Turkish Petroleum Company is a company incorporated in this country, and its
nationality is therefore British. The presence of foreign shareholders does not deprive
the company of its British nationality, nor does it affect the power of the Secretary of
State to make representations on its behalf.
If, on the other hand, Air. Silley acquired his option in the interests of the
Ottoman subjects in these five claims before the refusal of the prospecting licences,
there was at the time when it came into existence a British element in the claim; but
there are other obstacles to the support of the claim at Constantinople. Your client
maintains that when the Alinistry of Alines refused to issue licences to the applicants,
that Department acted contrary to the Turkish Mining Law, and that it did so without
any justification. The enquiries made by the Secretary of State, through His Alajesty s
Embassy at Constantinople, show that the Ottoman Government maintain that the
Turkish Mining Law did not apply in these cases, and that the refusal of the licences
was proper. This refusal is based on the view' that the concession of the oil deposits
in Alosul and Bagdad to the Civil List, from which it has since been transferred to the
Ministry of Finance, v r as, and remains, valid and in force, and thereby prevents the
Copv to Sndsa;
JUL1914