PUBLIC RECORD OFFICE
Reference :-
TLC.O. 885
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
21 PUBLIC RECORD OFFICE, LONDON
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3. The Crown Agents allude to the possible danger of the majority of the shares, and therefore of the voting power, in a Company holding a concession in a British Colony falling into the hands of foreigners, and my Lords concur with the view which they express that any Government interference to prevent such a situation arising would be an extreme step; they feel that action of this nature could not be enforced or defended unless the Government had agreed to make the Company some financial consideration.
4. I am to add that no objection is seen to the matter being discussed at a meeting of the Colonial Concessions Committee as proposed by the Crown Agents.
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No. 6.
I am, &c.,
C. I. THOMAS.
WAR OFFICE to COLONIAL OFFICE. (Received 16 March, 1911.)
SIR,
War Office, London, S.W., 14th March, 1911. In reply to your letter of the 27th January last, No. 37294/1910,* regarding the inclusion of a clause in covenants restricting to British subjects or companies the holding of concessions, I am commanded by the Army Council to inform you that it is rarely that such considerations arise in connection with War Office covenants. Each application for a lease or letting of War Department property at home or in the Colonies is considered on its merits, and the undesirability of allowing control to pass into foreign hands or of prejudicing legitimate British trade interests would be factors in the consideration of the case.
14404
No. 7.
I am, &c..
E. W. D. WARD.
MINUTES OF THE SEVENTH (ORDINARY) MEETING OF 1911 OF THE CONCESSIONS COMMITTEE, HELD ON TUESDAY, THE 25TH APRIL, AT 11.30 A.M.
PRESENT:
LORD LUCAS (in the Chair).
Mr. Cox.
Mr. ELLIS.
Mr. GRINDLE.
Mr. DAVIS.
Mr. BUTLER.
Mr. STUBBS.
Mr. VERNON.
Mr. EZECHIEL (for the Crown Agents). Mr. H. T. ALLEN (Clerk),
Mr. C. H. Ommanney, of the firm of Messrs. Sutton, Ommanney, and Rendall, the Solicitors to the Crown Agents for the Colonies, also attended the meeting.
Subject 1. (A) Standard Clause providing for “ Lessees to be British.”—Mr. Ommanniey said that, in drafting the Clause embodied in the letter from the Crown Agents of the 3rd December, 1910 (37294),† he desired to raise a discussion on the general principles involved. He pointed out that Section 15 of the Southern Nigeria Mining Regulation (Oil) Ordinance, No. 12 (quoted in the above-mentioned letter), deals only with alterations in the articles of association or constitution of a Company, and does not make any provision in regard to the original memorandum or articles: and (as Mr. Davis pointed out at a later stage) the Ordinance in question is defective, not only because it does not provide that a Company shall be a British Company at the outset, but also because it refers to Companies only, and not to individual lessees. Mr. Ommanney further explained that, generally speaking, the Government could protect itself by refusing to grant a concession
• No. 2.
† No. 1.
•
to any Company not constituted in accordance with the intention of the section in question; but he did not consider this power of refusal to be suflicient, and, there- fore, in drafting the proposed standard Clause he had included both Companies and individual Lessees, and had also tried to meet the case of assignments to under- lessees whether Companies or individuals. As regards both assignment and sub- letting, he thought it right that individual lessees should be acquainted, by the terms of the concession, with the requirements of Colonial Governments in the case of assignments or sub-leases.
Mr. Ellis raised the question whether it was necessary to have an all-British clause in ordinary Concessions, and enquired why the exploitation of the resources of British Colonies should be limited to British Companies. lle referred to the possibility of retaliation, and instanced that it would be awkward if, e.g., the Argentine Government adopted the same attitude in regard to railroad construction in that country. The circumstances of the oil concessions are, of course, peculiar; but he could see no reason for the inclusion of such a clause in, e.g., the British Guiana Steam Services Contract or the Falkland Islands Peat Concession. The Committee agreed that an all-British clause was not needed in all concessions; and Mr. Stubbs pointed out that such a clause was not adopted in Malaya, where one of the most important tin companies is a French concern." In fact, such a limitation. would be somewhat absurd in the Malay Peninsula, seeing that the territory is not British. Mr. Butler suggested, however, that, so long as the clause was required in any concession, a stereotyped form would be useful and Lord Lucas pointed out that the question whether the clause was applicable in every case would not affect its ternis. The Committee thereupon agreed that it would be advisable to decide upon a standard form of clause; and that the question of its applicability to any particular concession could be left to the department concerned.
Mr. Ellis then raised the question whether in concessions in countries to which the Berlin Act applies, an all-British clause would be contrary to the provisions of that Act which forbids the grant of any favour in a matter of trade. Mr. Butler replied that this point had been submitted to the Foreign Oflice in connection with the Shire Highlands Railway Contract, and that that Department had expressed the opinion that such a clause is not an infraction of the treaty.
Mr.
Mr. Grindle referred to the provision in the draft clause requiring that the previous consent in writing of the Governor shall be necessary in the case of altera- tions in the memorandum or articles of association. He said the point had been raised in connection with the Trinidad Oil Concessions, and that the British and Foreign General Securities and Investment Trust had asked that alterations should be permitted subject to subsequent disavowal by the Governor. In that case the Trust would notify the Governor of the alteration; and if the latter was of opinion that it was a contravention of the cardinal principle of the clause he could disallow it, and the alteration would become null and void. In reply to Mr. Cox, Mr. Grindle said that he understood that the Trust would agree to the disallowance being at the sole option of the Governor, and not subject to arbitration. Ommanney pointed out that the clause as drafted was not intended to require, and did not in fact require, the consent of the Governor to alterations of purely com- mercial importance, c.g., those made for Stock Exchange purposes, &c.; and that the powers of the Governor in this respect were clearly defined and limited by the words,†“in contravention of the foregoing provision," and "if such alterations shall, in his opinion, be contrary to the cardinal principle that the said Company shall be and remain a British Company under British control." He had considered the point raised by Mr. Grindle, but had felt that it would be "legislating back- wards to set the Company's machinery in motion before the consent of the Governor had been obtained. Mr. Cox pointed out that it would be more onerous on the Company to make the alteration and then to have to withdraw it if the Governor's consent were refused, especially as the alteration of the memorandum and articles of association is a cumbrous and lengthy proceeding. Mr. Grindle said the reply of the Trust to these objections was that it was not their intention to submit minor details to the Governor, but only matters affecting the principle of British control; that the process of previous reference involved delay: and that they feared the decisions of a captious Governor. As to the last point, Lord Lucas asked whether it was intended to allow any appeal to the Secretary of State from decisions of the Governor which might be considered arbitrary; but the general
• Lines 9 to 15 of clause as printed in No. 1.
† Lines 11 to 15 of clause as printed in No. 1.
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