"ملف II (F 94) 82/34 امتياز شركة أ.ب.و.ك" [ظ‎‎٨‎١] (٣٦٢/١٥٣)

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-of the D 'Arcy Concession, which act alone is binding on both the company and
the Persian Government. The mission entrusted to him in accordance with letter
No. 18059 of the 29th August, 1920, in your own publication of the D 'Arcy
Concession, was merely to bring about a final adjustment of all outstanding
questions between us up to date, and to evolve a practical scheme based on the
view expressed in the above-quoted French extract. In drawing up an agreement,
he most certainly exceeded his powers; his authority to do so was accepted by
you unquestioned, being to your advantage. The alleged agreement has never
been officially recognised or ratified by the Persian Government; but, as I have
said on various occasions, pending a more satisfactory basis of operation for the
future, which I shall be pleased to discuss with you whenever you are disposed,
my Government has unofficially acquiesced in this arrangement as a modus
vivendi for the time being. Developments have proved that its theory is in
practice unworkable. It has had the effect of completely destroying the Act of
Concession in many directions to the disadvantage of my Government, which |
manifestly should not take place. According to article 10 of the Act of
Concession, any company or companies formsd are to pay the Persian Govern
ment 16 per cent, of their annual net profits without any deduction or allowance;
but the alleged agreement has, so to speak, done away with that vital and
all-important article by excluding profits arising from the transport of oil by
means of ships and by making deductions for refining, distributing and market
ing, &c., all of which is contrary to the letter and spirit of the Act of Concession
and to the purport of the instructions given to Mr. Armitage-Smith. It is
obvious that the profits arising out of all subsidiary companies form part of the
annual net profits of the parent company and are therefore chargeable for royalty
purposes without exception.
Article 17 of the Act of Concession provides for arbitration in Tehran,
which clause is modified in article 2 of the alleged agreement to a course of
procedure which might conceivably be to the disadvantage of the Persian
Government. Therefore I think I am fully justified in saying that an agreement
which provides so many loopholes of advantage for the company, and which
even then is disregarded by them when their own interests are to be served, of
which fact the immediate refining allowance question is an outstanding example,
is no more binding on the company than on the Persian Government.
In conclusion, circumstances being similar, I quote again from paragraph 6
of the instructions given to Mr. Armitage-Smith appearing in Appendix III,
p. 20 :—
" En formulant sa reclamation, le Gouvernement imperial n'a point
demande un acte de faveur, il n'a fait que revendiquer les droits legitimes
qu'il pense avoir contre la compagnie, du chef de certains arrieres et des
dividendes indiiment retenus par cette derniere."
I wish to avoid further controversy on these questions, and fervently hope
this may be my last communication of such nature. Though the rights are, to
my belief, entirely on the side of the Imperial Persian Government, I am still
open to any acceptable offer the company may be prepared to make covering all
the points enumerated in Sir William McLintock's letter to Sir John Cadman.
Failing such, I earnestly request you, without further loss of time, to instruct
your legal advisers to get in touch with mine, so that we may reach a final and
complete settlement, before summer holiday arrangements intervene and further
retard us.
I remain, &c.
EISSA.