CONFIDENTIAL
British Embassy
11 Guang Hua Lu Jian Guo Men Wai Peking People's Republic of China
Telex 22191 Cable Prodrome Peking
Telephone 521961/2/3/4/5
C Leeks Esq
Government House
HONG KONG
HKB 020/6
Your reference
39
Our reference
Date
m
020/393/1
20 March 1989
1/31/5
Miss Maternity mr Camma 3/4
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ARBITRATION AND PRC ORGANISATIONS
1.
27
In my letter of 3 March to Richard Hoare, I said that I had reminded Shi Jicheng that he owed us a response to my earlier approach to him about the question of arbitration and PRC organisations.
2.
Shi told me during the post-JLG outing on 18 March that he had some news to pass on to me. When I called on him on other business on 20 March he turned to this subject and said that the MFA had written to the Guangdong Maritime Court on 26 January seeking their comments on the problem described by Mr de Nul. The Court had now replied saying that the Nanhai Oil Zhuhai Special Economic Zone Development and Services Company Limited and the joint venture company had agreed to settle the matter out of court. The joint venture company had submitted an application to the Guangdong Maritime Court for the withdrawal of their suit. The Court had replied on 31 January giving their approval to the joint venture company's request. Shi commented that the matter was therefore closed as far as legal process was concerned and that it was now up to the two companies to reach agreement with each other.
3.
I thanked Shi for having looked into this problem. While I was glad to hear that the two companies had decided to try and reach an amicable settlement between themselves, the information Shi had just given me did not address our fundamental concerns: as I had told him when I first approached him about this matter in January, we were not interested in the commercial aspects of the case but in the underlying principles of the views expressed by the Court to the effect that the Contracts Arbitration Clause constituted a violation of sovereignty forbidden by the Chinese Constitution. We would therefore still like to know
CONFIDENTIAL
/whether