R
PUBLIC RECORD OFFICE
Reference :-
C.O. 885
15 PUBLIC RECORD OFFICE, LONDON
|ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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That the Company contended that there should be no default in payment of debenture interest, and that the shareholders were entitled to the interest stipulated for under the Concession, as well as to full compensation for loss of revenue and other losses which have been incurred through the events which had taken place since the control and working of the railway was taken out of the hands of the Company.
That the Company further contended that unavoidable charges to administration since the Company lost control of its line were to be added to any sum paid to the Company for compensation for loss of revenue.
That the Company had put forward several other contentions of more or less importance, of which the most serious was an argument based upon paragraph 42 of the Concession which gave to the late Government of the South African Republic the right to appropriate the railway with all the assets of the Company at any time after its completion, provided that at least two years' notice of such intended appro- priation were previously given, the Government paying the full amount of the paid- up share capital with 7 per cent. interest thereon, and taking over all the debentures in so far as not redeemed. That the Company contended that under that clause the shareholders, in the event of the Transvaal Government taking over the railway, were entitled to such a sun as would, with dividends or payments under the guarantee, make up a return of 7 per cent. per annum during the investment. That an extract from the Dutch text of the Concession was enclosed, but that you saw no reason to doubt the correctness of the translation given in [Cd. 625]. That the Company further submitted their view of the terms on which the Transvaal Government must take over, on page 7 of the letter of 25th September above referred to, to which Mr. Cox was specially to call our attention.
That Mr. Cox was to request us to take the above matters into our consideration, and to advise you :—
(1.) Whether the fact that His Majesty's Government had taken over the shares formerly held by the Government of the South African Republic, and that those shares had been transferred to a nominee of the Crown, could be held to imply such a recognition of the Company's Concession as would entitle the Company to enforce at law the provisions of that Concession against His Majesty's Government as successors of the Government of the South African Republic?
(2.) Whether His Majesty's Government could maintain that they were not liable for the defaults and misconduct of the officials of the late South African Republic, and were entitled to repudiate responsibility for the contractor's debt and for other obligations of the Company against which the late Government had not expressly undertaken to indemnify the Company either under that concession or under other formal agreements?
(3.) Whether His Majesty's Government were bound to pay all arrears of interest due on debts or shares, or whether they were entitled to refuse to pay such obligations as fell due before the annexation of the Transvaal, or before the date of the occupation of the line by His Majesty's forces?
(4.) What was the proper construction of the 42nd clause of the Concession? (5.) What, having regard to all the circunstances of the case, was the limit of the liability of His Majesty's Government, and what charges or obligations was His Majesty's Government bound to meet if it took over the railway?
We have taken the papers into our consideration, and, in obedience to your commands, have the honour to
Report
1. That no Court of Law has jurisdiction to enforce the adoption of the Concession by His Majesty's Government as successors of the Government of the late South African Republic. The assumption of the liabilities of the extinct Government is a matter of international usage, but cannot be enforced in Municipal Courts. In the present case, however, His Majesty's Government has not repudiated the Concession, and we do not see how, in the face of the report of the Commission, of the negotiations for purchase and the taking over of the shares, His Majesty's Government can now be advised to take up the position that the Concession lapsed with the fall of the South African Republic. If, then, His Majesty's Government adopts the Concession-and we do not well see how any other attitude can be assumed the rights of the Company might be enforced by Petition of Right, or any
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analogous process according to the law of the Transvaal. These rights, however, may, of course, be modified by legislation on equitable principles in the Transvaal.
2. We think His Majesty's Government ought to recognise any legal obligation arising out of the contract of the late Government of the South African Republic with the Company. We are not in a position to advise whether the claim made by the Company to be indemnified, wholly or in part, against the judgment obtained by the contractor can be substantiated as arising from any breach of the contract with the Company. Malice appears to be charged, and if it was a mere tort of which the South African Republic Government was guilty His Majesty's Govern- inent would not be liable.
3. We think that His Majesty's Government are bound to pay all arrears of interest due on debts or shares.
1. We agree with your view that the 7 per cent. interest mentioned in the 42nd clause of the Concession means a premium of 71 per cent.
5. His Majesty's Government are, in our opinion, under an obligation to pay the arrears mentioned in No. 3, and a reasonable compensation for the use of the line by His Majesty's Government from the date on which it was taken possession of. In the event of their taking over the line they should estimate the purchase money strictly in accordance with Clause 42, upon the construction of that clause mentioned in (4). We also think that the amount of the deposit retained should be paid to the contractor. We do not think that the claim for expenditure in connection with the central administration, or the claim for damage caused by warlike operations to the rolling stock, or the permanent way, can be sustained.
We have, &c.,
The Right Honourable Joseph Chamberlain, M.P.,
&c.,
&c.,
&c.
R. B. FINLAY. EDWARD CARSON.