Coll 28/39 ‘Persia: Printed Correspondence 1929-1936’ [‎94r] (198/1174)

Provmeml Vice-Governors are expected to take a course at the Keredi School
and their appointment may depend on certificates of the Department of
Agriculture. r
14-1 am sending a copy of this despatch to the Department
Trade (unnumbered).
of Overseas
( 61 )
Despatch pbom His Majesty s Charge d’affaires, Tehran, to the Foreigx
Office, London, No. 121, dated the 7th March 1936,
With reference to your predecessor’s despatch No. 443 (E.-4355|4355|34)
of the 22nd August, 1935, I have the honour to transmit to you, herewith, a
copy of a despatch from His Majesty’s Consul at Ahwaz regarding the adminis
tration of the bankrupt estate of Mr. W. N. Sequiera.
2. It will he remembered that the suggestion, put forward in Sir Hughe
Knatchbull-Hugessen’s despatch No. 280 of the 29th June 1935, that the assets
of this estate should now be distributed by His Majesty’s Vice-Consul at
Khorramshahr, was not adopted because it was held that this course would be
incompatible with the treaty obligations of His Majesty’s Government in the
United Kingdom. His Majesty’s Consul at Ahwaz was accordingly instructed
to arrange for the administration of the estate to be handed over to the Iranian
Courts. It was realised that this procedure would not be in the interest of the
creditors, but account was taken of the fact that they were mainly non-British
subjects, and it was considered unwise to adopt in their interests a course which
would involve His Majesty’s Vice-Consul in action illegal under international
and Iranian law. So far, therefore, as the arguments advanced in paragraphs
3 of Mr. Consul Watkinson’s despatch of the 14th February are concerned, there
would not appear to be any grounds for reconsidering the instructions contained
in Sir Samuel Hoare’s despatch under reference.
3. In paragraph 2, however, of his despatch, Mr. Watkinson suggests that
the course of handing over the estate to the Iranian authorities might involve
him or His Majesty’s Vice-Consul at Khorramshahr not in illegal action but in
most awkward discussions with these authorities. I share to the full
Mr. Watkinson’s apprehensions on this point. I fear that it is only too likely
that some member of the local judicial administration might seek to make capital
out of the opportunity afforded by a case in which a foreign consular authority
has undoubtedly erred. It is clearly most undesirable that this should happen,
and I venture therefore to take advantage of the opportunity afforded by para
graph 7 of Sir Samuel Hoare’s despatch under reference to suggest that further
consideration should be given to the matter before action is taken on the instruc
tions issued to Mr. Watkinson.
4. I think that the most correct alternative course of action would be to
explain the whole story to the Ministry for Foreign Affairs and to invite their
assistance in finding a solution which would avoid the risk of awkward publicity
and of complaints from the creditors. There is much to be said for this course
and it is quite possible that the Ministry for Foreign Affairs would be sympa
thetic and helpful. On the other hand, past experience shows that the Ministry
for Foreign Affairs are by no means always successful in imposing their views or
wishes on other Departments, and it is doubtful whether they would in fact be
able to prevent publicity if the creditors did raise objections or complain of the
conduct of the case by His Majesty’s Vice-Consul. I am therefore reluctant
to adopt this course.
5. Mr. Watkinson suggests an alternative procedure, namely that the
creditors should be held to be time-barred from receiving any further dividend,
since no application for payment has been made since 1921. I do not know
whether this course would be legal under English law, but I am informed that
it would in fact be correct under Iranian municipal law. An Iranian lawyer
to whom the Oriental Secretary to this Legation put the case m outline, withom
mentioning the precise facts or names, stated that the point m question would
be covered by Article 219 of the Commercial Code, a French translation ol
which I have the honour to enclose. It will be seen that under this article the
relevant period of prescription is live years. The lawyer consulted appeared
to hold that the prescription applies to all bankruptcies, “ the
Period of five vears runs from the date of the bankruptcy . the rec ^
duties are finished in five years, and no creditor can claim anything from tha
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