Coll 30/208 'War Compensation & Insurance at BAHREIN' [‎111v] (222/452)

MINUTE.
1. There has for some time been outstanding an enquiry from the Bahrein
Petroleum Company with regard to compensation for damage to property by
enemy actionijorby the application of "scorched earth” measures on the
orders of tne^authorities or the Bahrein Government.
2. In paragraph 4 of their telegram No.3894 of May 17th last, the
Government of India agreed that the reply to the Company should be in
accordance with what they understood to be the attitude of the Treasury,
viz. that the question *2ould not be decided until after the war; and they
added that it rould then be possible to assess more clearly the relative
responsibilities of H.M.G* and themselves. Meanwhile, however, the
Treasury had agreed to the publication of a statement (reproduced in our
express letter to the Government of India of October 13th on Ext.5033/42)
to the effect that it is the intention of H.M.G. to help in the
replacement or repair of property and goods destroyed or damaged in the
Colonial Sapire as a result of the war. It was felt in this Department
that an attempt should be made to obtain the consent of the Treasury to
the application of this formula to Bahrein and Koweit. This was done in
Mr. Peel's letter to Mr. Syers No.Ext.2881/^2 of July 28th last. In
describing our relations with the two Arab States this letter said that
“£he political control which, by virtue of her treaty rights, H.M.G.
exerciseSoVer these Sheikhdoms, is in practice exercised by the
Government of India”. On the other hand it was emphasised that in as
much as the C. in C. Middle East (now the C. in C. Persia-Iraq Command)
was responsible for the defence of the Sheikhdoms, the military authorities
on the spot-who might cause damage to be inflicted on property or issue
orders for destructive measures would be the agents of ^sjmilitary
command over which the Government of India had no control. It was
argued that for this reason the question of compensation in the
circumstances contemplated was one for consideration by H.M.G. rather
than the Government of India.
3. The Treasury reply of September 15th (flagged) simply refused to
agree to the two Sheikhdoms being covered by the formula (which had
meanv/hile been extended to Burma and Newfoundland) •
4« The submission at Ext.5035/42 shows what action we took on receipt
of the Treasury letter. On the one hand we wrote to the Treasury
suggesting that if, as appeared, their refusal was based simply upon
the fact that Bahrein and Koweit are not British territory, they were
over-simplifying the problem; and we accordingly reserved our right to
raise it again with them, should it become necessary to do so. On the
other hand, now that the Treasury had declined to take ary responsibility
for war damage in the two Sheikhdoms, it appeared necessary to ask the
Government of India whether they still wished the Company to be told that
the question could not^e decided until after the war - since their
agreement to this reply^clearly assumed that the post-war discussion
of the problem would not be pre-judged by any disavowal of responsibility
on the part of H.M.G.
5* The Government of India have now replied urging the necessity of
achieving for Bahrein and Koweit the position reached with regard to
war damage in the Colonial Empire, Burma and Newfoundland. The official
reply is vigorously supported by a personal telegram from the Viceroy.
For the mos u part the two telegrams emphasise and amplify the arguments
in our letter to the Treasury of July 28th No.Ext.288:1/42• But they take
exception to the passage in that letter quoted in paragraph 2 above, on
the ground that H.M.G. retained control in regard to all matters of high
policy in the Arab Sheikhdoms andvare final arbiters in major
questions arising therefrom. The locus classicus for the relative
responsibilities of H.M.G. and the Government of India with regard to
the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. is still the^ Historical Summary of Events in Territories
of the Ottoman Empire, Persia and Arabia affecting the British position
eui the rersian Gulf 1907-1928, usually known as P.G.13. The following
quotations show that the Government of India's statement of the position
is correct:- ^ ^
The effect of the/Masterton-Smith Committee of 1921 was to
leave control of Bahrein affairs ••••••••••••• to the Government of
India,/
n
x now India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors.
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