'F 80 File 82/34 I APOC Concession' [‎109r] (202/436)

economic crisis which has diminished the Company's profit as
it has diminished those of all other large oil undertakings.
In law and in equity the Company's case is unassailable. The
only power of cancellation contained in the D 1 Arcy concession
expired nearly thirty years ago. Moreover the concession
provides for the settlement by arbitration of disputes which
have not proved amenable to negotiation, and the Persian
Government has consequently broken the agreement both by
cancelling the concession and by failing to have recourse to
arbitration. Its plea that it was not constitutionally bound
by the original concession is invalidated by the fact that the
concession was recognized and the royalty accepted by a success-
si on of Governments both before and after the establishment
of the constitutional regime. In equity the Company can claim
that its activities have been of enormous benefit to Persia,
where it has spent millions in wages and purchase; that it has
done its utmost to preserve a Just balance between the claims
of its stockholders and those of the 3HAH 1 3 Government| and
finally that the Persian Government shared none of the risks
involved in the exploration of their oil resources, umished
no part of the capital required f>r their exploitation, and
owe their development and the consequent enrichment of Persia
to the Company^s efforts.
Meanwhile the Company has refused to recognize the
cancellation of the concession; the Persian authorities have
formally adhered to it in a second note; and the dispute is
now engaging the serious attention of HIS h AJSSTY'S GOV ■
On Monday Mr.LuM informed the House of Commons that the
Government had made the "strongest representations^ to the
3HAH 1 3 Government through their .inister at Tehran, and announced
that they would take ?f ail legitimate measures to protect their
just and indisputable interests'* in case of need. The British
Government would in any case be justified in protecting the
rights of a great British undertaking against' illegal and
inequitable invasion by a foreign Government. The fact that
as stockholders in the Company they are the trustees of the
national holding of over £.7^000,000 in ix,s shares, and that
the Persian Oilfields are the principal source of the fuel used
by the «oyal Uavy, is an additional reason for their vigorous
defence of an excellent case. At present, while the dispute
is the subject of diplomatic negotiations between London and
Tehran, it is unnecessary to enlarge on the implications of the
Persian Governments decision. It is possible, and It is
certainly to be hoped, that they have not yet fully realized
the unfriendly nature of their action in so far as it threatens
or may ultimately threaten an essential British interest.