'File 82/34 II (F 94) APOC Concession' [‎53v] (119/362)

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new set of proposals on a different basis were under consideration
by the Government, and the company naturally waited to know what
these new proposals were. The director of the company in Tehran
continued to receive assurances from responsible Persian Ministers
that these new proposals were being-prepared. On the 25th October,
as no proposals had come forward. Sir John Cadman instructed the
resident director to enquire about the matter. On the 16th November
the resident director reported that the Minister of Finance had
confirmed to him that these new proposals of the Persian Govern
ment were almost ready. The Council will observe from this short
account of the dates that down to that moment the company had
not the slightest reason to suppose that its Concession was in
jeopardy. On the contrary, the authorised representative of Persia
had initialled, agreed and formulated proposals drawn up in London,
and in Tehran the company was being told right down to the
16th November, 1932, that alternative proposals drawn up by the
Persian Government were just ready to be produced. Instead of
producing them, the Persian Government, as already stated, made
no further communication, but, on the 27th November, announced
that the Concession was cancelled. >
These being the true facts the Council may be left to judge
whether they are fairly and impartially stated in the remarkable
version contained in paragraphs 19-23 of the Persian memorandum.
The document of cancellation does not purport to cancel the
Concession on the ground of any breach by the company, but makes
it clear that the Persian Government took this illegal step as the
most effective means of trying to get a new arrangement which would
be more favourable to its interests. That is, in the submission of His
Majesty's Government, a wholly unjustified proceeding, a breach of
international law, and a wrong in respect of which His Majesty's
Government are both entitled and obliged to take up the matter on
behalf of the company. I
His Majesty's Government have studied with care and the
greatest respect the memorandum presented to the Council by the
Persian Government, and have ventured to comment on one or two
passages. Without occupying more time, my Government desire to
point out that the document is largely composed of allegations which,
even if they were well founded, could not possibly provide any
justification for cancelling the Concession. Many of them refer to
matters of ancient history that have since been settled by large
payments which the Persian Government does not offer to repay.
Again, the suggestion that the company prevented the use of the
arbitration clause is quite unfounded. The arbitration clause is at
all times available to either party, and it is not within the power of
the other party to forbid its being used. His Majesty's Government
will take the opportunity of delivering a written document which
deals consecutively and more in detail with the collection of points
of complaint which is contained in the Persian memorandum. They
will be able to show that the complaints are in large measure ill-
founded, and, in any event, could not constitute a justification for
unilateral cancellation.
I should like now to say a few words on the juridical basis of
this application,
I have, I hope, shown to the satisfaction of the Council that there
has been nothing in the past conduct of the company which could,
on any view of the law, justify the Persian Government in cancelling
a valid concession by their own unilateral act, and it is therefore
unnecessary for me to trouble the Council with any discussion of
the question suggested in paragraph 28 of the Persian Government's
case. I should, however, say something on the contention adduced
m the last portion of the Persian Government's memorandum to
the effect that His Majesty's Government, as they suggest, have not
the right to take up the case of the company, on the ground that
the company has not had recourse to the Persian courts.
The principle that where an effective remedy exists in the local
courts, diplomatic action is not admissible until that remedy is
exhausted, is well established, and I do not dispute the principle
at all; the Persian Government have reminded the Council that
His Majesty's Government have relied on that principle in a case
which was recently before the Council, and I need hardly say that,