*

CONFIDENTIAL

WE OFFER NO

7. YOU WILL BE AWARE THAT BA OPERATES TO AND FROM HONG KONG WITHOUT A LICENCE ISSUED BY ATLA, IN RELIANCE UPON AN EXEMPTION GRANTED BY THE THEN GOVERNOR TO BC AC ON 31 JULY 1964. OPINION ON THE VALIDITY OF THAT EXEMPTION AS IT OCCURS TO US THAT ONE OR MORE OF THE AIRLINES WHICH WILL BE PARTIES TO THE HONG KONG PROCEEDINGS MAY SEEK TO CHALLENEGE IT. WE DO NOT IMAGINE, HOWEVER,

THAT BA WILL WISH TO RELY UPON THE EXEMPTION FROM LICENCING TO LIMIT, IN ANY WAY, ITS INVOLVEMENT AND ITS OBLIGATION OF DISCLOSURE IN PROCEEDINGS IN WHICH IT WILL ITSELF ALMOST CERTAINLY BE AN OBJECTOR. WE DRAW THE MATTER TO YOUR ATTENTION MONETHELESS.

8. SHOULD THERE BE NO DIRECTION BY THE SECRETARY OF STATE TO EASE THE DIFFICULTIES OUTLINED ABOVE, TWO PRELIMINARY DECISIONS WILL NEED TO BE MADE. THEY ARE:-

1)

WHICH VENUE, AFTER COMPLIANCE WITH THE PROCEDURES FOR APPLICATIONS AND OBJECTIONS IN BOTH LONDON AND HONG KONG, WILL HOLD THE FIRST LICENCING HEARING. THE POTENTIAL DIFFICULTIES AND EMBARRASSMENTS ARE OBVIOUS AND HAVE BEEN TOUCHED UPON EARLIER,

AND

11)

WHAT CONSTRUCTION WILL BE PLACED BY THE CAA UPON SECTION 3 OF THE 1971 ACT. SHOULD

SHOULD IT BECOME NECESSARY FOR THE CAA TO REACH A DECISION ON WHAT IS A DIFFICULT LEGAL POINT, THAT DECISION WILL ALMOST INEVITABLY BE PLACED BEFORE THE COURTS BY ONE OR OTHER AGGRIEVED PARTY SEEKING JUDICIAL REVIEW UNDER ORDER 53 OF THE RULES OF THE SUPREME COURT (U.K) THE ATTENDANT DELAYS WILL BENEFIT NO-ONE AND, INDEED, EACH ADDITIONAL HEARING WILL INCREASE THE ADVERSE PUBLICITY WHICH INITIALLY WE JOINTLY SOUGHT TO AVOID AND WHICH WILL BE SUBSTANTIAL ENOUGH WITHOUT THESE MATTERS BEING AIRED PUBLICLY BOTH BEFORE THE CAA IN THE U.K AND ATLA IN HONG KONG. UNDOUBTEDLY IN THIS CONNECTION ONE HEARING IS INFINITELY

TO BE PREFERRED.

9. WE BELIEVE THE DIFFICULTIES INHERENT IN THIS MATTER TO BE SUBSTANTIAL AND WE HAVE NO DOUBT THAT THEY ARE EXERCISING YOUR MINDS ALSO. WE SHALL, HOWEVER, BE MOST GRATEFUL IF YOU WILL GIVE THE MATTERS REFERRED TO HEREIN YOUR URGENT CONSIDERATION AND LET US HAVE YOUR VIEWS AS SOON AS POSSIBLE.

10. WE UNDERSTAND THAT CPA HAS CEJECTED IN LONDON TO THE BCAL AND

ونا

CONFIDENTAL

/LAKER

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