Coll 28/95 ‘Persia. Relations with H.M.G. Private claims against H.M.G.: case of the S.S. “Kara Deniz”.’ [‎91r] (181/691)

40. Ill paragraph 19 of his despatch No. 69 of the 18th February, 1933,
Sir R. Hoare says that it is worthy of note, since many claims are expressed in
krans (normally 50 to the £), that the kran has depreciated considerably during
the last twenty years, and that unless payment is made in the kran-sterling rate
prevailing at the time considerable losses will result. This is no doubt the case,
but, though in a few cases the equivalent of krans is mentioned, in most instances
it is not, and it would be a difficult matter to translate into sterling the ever
fluctuating kran, in claims which range over many years and many vicissitudes
n 81 ^ 11 a n . irs ' P ara g ra pb he assesses the approximate grand total
P res e n t rate of exchange at between £650.000 and
£700,000, which seems to represent fairly closely the equivalents of 50 krans and
some 15 rupees Indian silver coin also widely used in the Persian Gulf. to the present £ sterling. The great majority of claims of all
classes are expressed in krans—sometimes tomans 10,000 Persian dinars, or a gold coin of that value. (equal to 10 krans), though
some claimants have preferred to state their claims in sterling, some (Indian) in
rupees Indian silver coin also widely used in the Persian Gulf. and one (with American connexions) in dollars. All these currencies seem
to have sunered depieciation of late, though in unequal degrees. This Question
of depreciated currencies is seemingly one that might give rise to considerable
argument before a tribunal if the claims were to be argued there. A good many
of the claims preferred by His Majesty’s Government or the Government of India
are for sterling amounts or rupees Indian silver coin also widely used in the Persian Gulf. . The point is perhaps one that has come up
tor decision in the case of former international tribunals on the subject of
claims(); but it would seem unfair, on the one hand, if claimants should be
awarded what may be but a fraction of their original losses, or, on the other, that
it they originally claimed in a currency now less depreciated they should have a
fortuitous advantage over those who did not,
41. At the same time inspection of the amounts claimed by the various
claimants leaves the impression that these are often based on a generous estimate
° osses incurred. So far as regards firms formerly trading in Persia of
which there are a large number among the claimants, it seems probable that in
view of the hazards to which their merchandise was exposed when in transit
through a semi-barbarous country, it could only be by placing a high price upon
their goods that they could continue to carry on a profitable business. Firms like
leglers, of Manchester, appear to have sustained huge losses (amounting in their
case to about £50,000), from robberies, often repeated, but nevertheless were
seemingly able to carry on a profitable business, yielding good results. Individual
claims of all classes seem to show a like tendency to estimate losses at a high
figure sometimes held in check by our Legation or by the British consulate dealing
with the claim. Interest again on the amount claimed is usually estimated at S
i?* ^ ^ er cen ^' interest is not infrequently asked, leading to claims of
which the most notable instance is that of Mr. Haycock (Isfahan Claim No. 1.
category (a)), where the total amount claimed is more than five times the original
debt. Yet there appears to be no actual rule concerning the addition of interest
as regards claims for losses made by one nation against another; in the absence
of any treaty provision governing the matter the question of interest seems to
rest entirely with the tribunal before which the claims may be brought.
Insurance Companies.
Q . Jp- In P ara graph 17 of his despatch (No. 69) of the 18th February, 1933
• ir rloare says that the question of payments by insurance companies is of
importance in regard to all the claims; that he has no information whether any
and if so how many, claims were met in this way; and that he concludes that in
SUCH cases the claim should be regarded as having been transferred from the
original claimant to the insurance company. This is no doubt the case—at any
rate if the insurance company was British—and in former correspondence with
our Legation m 1923 (and previously), we have laid stress on the fact that if a
claimant was insured against loss in this way, it in no way lessened the claim.
Ine documents furnished do not, however, throw very much light on insurance
companies or underwriters’ claims, though it seems'to have been a somewhat
or mary practice for British firms trading in Persia to insure their goods against
losses, where they could find an insurance company willing to accept the risk.
H The United States Government hold that in the absence of a stipulation to the contrary
t0 P a y ° b k? a t lon s established in foreign currency at the rate of exchange current
< io date of payment (see case of Lieut.-Colonel Liddell’s claim against United States (1922-25)