Coll 15/3(1) 'Egypt. Abolition of Capitulations in Montreux Conference and Convention 1937' [‎298v] (601/1220)

‘ ‘ (2) That the term ‘ violation ’ should be taken to mean not only
violations of the letter but also violations of the spirit of the law.
“ It is further understood that the absence of jurisdiction to question the
validity of the application of Egyptian laws or regulations to foreigners
entails^ as a consequence, the absence of any jurisdiction to consider whether
Egyptian laws are inconsistent with the principles generally adopted in
modern legislations or whether they discriminate against foreigners.”
Non-Discrimination.
36. Paragraph 6 of the annex to article 13 of the Treaty of Alliance
provides—
“His Majesty the King of Egypt hereby declares that no Egyptian
legislation made applicable to foreigners will be inconsistent with the
principles generally adopted in modern legislation or, with particular relation
to legislation of a fiscal nature, discriminate against foreigners, including
foreign corporate bodies.”
Paragraph 13 of Document A states :—
“ The Montreux Convention will contain a provision in terms similar to
those of paragraph 6 of the annex to article 13 of the Treaty of Alliance.”
Effect is given to Document A on this point by—
(a) Paragraphs 2 and 3 of article 2 of the convention, which read
“ It is understood that the legislation to which foreigners will be subject
will not be inconsistent with the principles generally adopted in modern
legislation, and will not, with particular relation to legislation of a fiscal
nature, entail any discrimination against foreigners or against companies
incorporated in accordance with Egyptian law wherein foreigners are
substantially interested.
“ The immediately preceding paragraph, in so far as it does not con
stitute a recognised rule of international law, shall apply only during the
transition period.”
(b) Part I of the protocol which reads :—
“ It is understood that the provisions of article 2 , paragraph 2, of the
convention relating to non-discrimination, which are applicable during the
transition period, must be interpreted in the light of international practice
relating to undertakings of that nature between countries enjoying legislative
sovereignty.”
(c) Paragraph 2 of the declaration of the Egyptian Government, which is as
follows:—
‘ ‘ W ith reference to article 2 , paragraph 2 , of the convention and the
protocol relating thereto, the fact that the effect of the non-discrimination
rule referred to in the above-mentioned article 2 is limited to the duration of
the transition period, does not imply any intention on the part of the Royal
Egyptian Government to pursue thereafter in this matter any contrary policy
of discrimination against foreigners. The Royal Egyptian Government is.
moreover, prepared to conclude Establishment Treaties and Treaties of
Friendship with the various Powers.”
3/. Paragraph 2 of article 2 of the convention differs from paragraph 6 of
the annex in the Treaty of Alliance (i) in that it does not mention in terms
foreign corporate bodies,” but the Drafting Committee’s report (p. 15) states
that this was not necessary as foreign companies are covered by the ter®
foreigners ; and (ii) in "that it mentions expressly Egyptian companies in
which foreigners are substantially interested (thus goin 0, beyond the treaty an
Document A). Ihe Drafting Committee’s report also states—
In the framing of this text, account was taken of the fact that among
the principles generally adopted in modern legislations, which are refene
to m paiagiaph 2 of the text, should certainly be included the rule concernin D
respect for legally acquired rights.
It is, moreover, understood that the non-discrimination rule set fod
m paragi aph 2 of the new text, although considered more especially in iegm
to its application to fiscal matters, is a rule of a general nature. .,
The term legislation ’ used in article 2 is to be taken in the wi
sense which it bears in English.”