CO537-4841 — Page 16

OUTWARI

FROM THE S

STATE FOR THE COLONIES

54472/1/49

Cypher (0.T.P.)

TO HONG KONG (Sir A, Grantham)

Sent 23rd December 1949.

PRIORITY No. 1899

Secret

21.00 hrs.

4/7

Addressed to Governor, Hong Kong

Repeated to Commissioner-General, 3.E.Asia,

No. 705 (Please pass copy to Governor, Singapore No. 1207) High Commissioner, Federation of Malaya, No. 1364

#

*

Kanking

Your Secret despatch No. 36 of 15th December.

Effect of Recognition of Communist Government. Following comments have been drafted in

consultation with Foreign Office:-

We hesitate to give general answers to the questions in paragraph 6 of your despatch. necessary to consider concrete cases when they arise.

It will be

26.

Subject to this caution the following comments represent the furthest we can go in answering your questions:-

(a) English courts have regarded recognition as being retroactive in its effect and this seems to be the generally accepted vior. the exact date from which recognition will be regarded as

Therefore, we camot forecast effective in matters relating to property. question which normally has to be answered by the courts

This is a where the action is brought. 7th Edition Volume I. p. 133.)

(See for example, Oppenheim, to the retroactive legal effect of recognition will not alter

The decision of a court as the date of the recognition itself. Hong Kong court can, of course, be made before the delivery No such decision in a of H.M.C.'s note according recognition.

(b) Recognition will not effect ownership of property which now belongs to the Republic of China, but immediately upon recognition, the Communist Government will automatically be ertitled to control and take possession of the property of the Republic in Hong Kong. Communists will not be required (as suggested in your paragraph

Therefore, the 4) to prove their legal title to such property in the courts of the colony. shareholdings in quasi public corporations and other companies. The property of the Republic will include any Therefore upon recognition, the Communist Government will be entitled to exercise such control over those corporations and companies as was formerly enjoyed by the Nationalist Government.

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