The Date Gardens in Iraq of the Sheikhs of Koweit [Kuwait] and Mohammerah. Scope of undertakings given by HM Government in 1914. Case for the opinion of the Law Officers of the Crown and Opinion thereon T W H Inskip and F B Merriman, Law Officers' Department, 29 Mar 1933. inc The date gardens in Iraq of the Sheikhs of Koweit and Mohammerah. Historical summary [undated] [‎2v] (4/70)

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5. The date gardens referred to in these letters are situated
in territory which has become part of Iraq. Iraq is now an inde
pendent sovereign state and the literal fulfilment of the under
takings in question could therefore only have been rendered possible
if His Majesty's Government had retained some measure of control
over the Government of Iraq or had placed upon that Government
an express treaty obligation to concede the immunity from taxa
tion to which the undertakings refer. Unfortunately this was not
done and His Majesty's Government have since found it impossible
to induce the Iraqi Government to admit any obligation in the
matter; and for various reasons (into which it is unnecessary for
the present purpose to eiiter) it has not been thought desirable to
submit the dispute between His Majesty's Government and Iraq,
upon which your predecessors advised in 1930, to the Permanent
Court of International Justice, or any other international tribunal.
Since therefore His Majesty's Government are not in a position
to give literal effect to the undertakings given to the Sheikhs, the
question arises whether there is a legal obligation on His Majesty's.
Government to pay compensation to the Sheikhs on account of
certain events relating to the date gardens now taking place in Iraq,
upon the assumption that His Majesty's Government fail to prevent
them. This question must depend, in the first place, on whether*
these events are or are not contrary to the promises to the Sheikhs
referred to in the preceding paragraph, and this is the matter upon
which the opinion of the Law Officers is now desired. The events
in question are {a) the levy upon the produce of these gardens by
the Iraqi Government of a particular kind of tax called the Istihlak
tax; (6) the institution by private persons in Iraq of proceedings
in the Iraq courts (hitherto successful) for the recovery of possession
from the Sheikh of Koweit of certain of the gardens possessed by
him. There are therefore two separate questions, and it will be
convenient to deal with {a) first.
6. For some time after the creation of the Kingdom of Iraq,
the system of taxation in that territory included a tax on land based
upon and fundamentally similar to the Turkish tax which was in
force at the time when the undertakings were given to the Sheikhs.
The method of determining the amount of the tax varied according
to the nature of the land, the character of the crops, the system of
irrigation employed, etc.; but in the case of the large estates in
Basra similar to the properties of the Sheikhs the assessment was
based on a valuation of the area under cultivation. The tax was in
all cases payable bv the landowner, leaseholder or occupier of the
land in question. It is not disputed that the levy of this tax upon
the Sheikhs would have been contrary to the promises of His
Majesty's Government and although this tax was as a matter of
Iraqi law considered to be exigible in respect of the date gardens
owned by the Sheikhs of Koweit and Mohammerah, the High Com
missioner was able, by putting pressure on the Iraqi authorities
from time to time, to induce them to refrain from actually collect
ing it.
7. In June, 1931, however, a new system of taxation was
introduced which replaced the previous tax upon land by a tax upon
produce. The text of the law instituting this tax will be found
in document No. 3 in the Appendix, p. 9 et seq. Under this law no
tax is imposed upon land as such, nor is any produce which is re
tained for consumption by the occupier of the land or his family
subject to tax. The new tax, which is known as the " Istihlak
tax," is levied only upon that portion of the produce of land which
is sold or stored or transformed into another shape by artificial
means, or exported from Iraq. It is collected not from the land
owner or occupier as such, but from the person who sells the produce
or from the exporter who ships it abroad who may or may not be