Coll 5/10 ‘Air Route to India: Persia; Arabian Coast Route; Negotiations with Arab Sheikhs’ [‎342r] (694/800)

THIS DOCUMENT is THE property OF HIS BRITANNIC MAJESTY'S GOVERNMENT
PERSIA.
CONFIDENTIAL.
' O C n
) Z D U
sptember 21, 1931
Section 1.
E 4727/439/34] No. 1.
The Marquess of Reading to Mr. Dodd [Tehran).
Foreign Office, September 21 , 1931.
(No. 543. Very Confidential.)
^ ir ’ T ttatttp a a * , L vjjice, September 21, 1931.
I HAVE received your despatch No. 423 of the 10 th August in which you
request to be iinnished ith a considered opinion on the question whether in
the event ot the Persian Government renewing the nermissiofi at nrPQPnt
requ^u ^ ^ opinion on the question whether, in
the event of the Persian Government renewing the permission at present enioyed
by the Dutch and French air lines to fly along the Persian shore of the Persian
Gulf, His Majesty’s Government would be able to claim a similar extension of
permission on behalf of Imperial Airways on the grounds of their rights to most-
favoured-nation treatment in Persia.
2. As you are aware, most-favoured-nation treatment in Persia is accorded
to British subjects and their trade by article 9, paragraph 2 , of the Amdo-Persian
Treaty of 1857, which runs as follows :—
The high contracting parties engage that the treatment of
their respective subjects, and their trade, shall also, in every respect be
placed on the footing of the treatment of the subjects and commerce of’the
most favoured nation.”
3. In order to establish the right to claim for Imperial Airways, under this
treaty article, permission to use a route in Persia for a commercial air service,
on the ground that similar permission had been given to French and Dutch air
transport companies, it will be necessary in the first place for His Majesty’s
Government to show that Imperial Airways are covered by the word “ subjects.”
The first question, therefore, is whether, in this treaty, the word “subjects”
applies to “companies,” that is, whether it includes corporations as well as
individuals. His Majesty’s Government do not usually interpret the word
“subjects ” as including corporations, as is shown by the ordinary commercial
treaties between Great Britain and other countries, which contain certain articles
giving rights to subjects and citizens, and certain other articles setting forth
the treatment to be accorded to companies. On the other hand, there are certain
old treaties in connexion with which His Majesty’s Government have, in the
past, contended for, and have in practice secured, an interpretation of
“subjects ” as including companies.
4. But even if this difficulty can be overcome, it is difficult to express a
categorical opinion on the possibility of establishing conclusively a legal case
under the most-favoured-nation provisions of the treaty of 1857. The Persian
Government might w T ell endeavour to complicate the legal point at issue. They
might, for example, assert that they had decided to reorganise completely their
air communications, and had reached the conclusion that it would be in Persia’s
best interests to grant a concession to a particular foreign company, or companies,
giving them under suitable conditions the complete monopoly of operating air
services across Persian territory. It is questionable whether, in that event, it
would be possible for His Majesty’s Government to establish a claim that, because
Persia had given a concession to companies of French and Dutch nationality,
she was also bound under her most-favoured-nation obligations to grant the same
or a similar concession to a British company. The Persian Government might
claim that most-favoured-nation rights could not be considered as applying to
the grant of concessions, since a concession obviously cannot be extended to an
unlimited number of concessionnaires.
5. For these reasons, it is not possible to state in advance, before the question
has arisen in practice, and before it is known in precisely what form the question
i s likely to arise, how strong a claim His Majesty’s Government could advance
for most-favoured-nation treatment in this respect. The strength of such a claim
must depend largely upon the form in which the question arises, and this in its
[254 x— 1 ]