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view of the Committee was opposed to involving the Secretary of State by specifi- cally mentioning him in the clause. Mr. Cox said that it would open a

** serious door if arbitration on the point was allowed; and Mr. Grindle pointed out that the difficulty of arbitrating on such a matter lay in the fact that most of the evidence would be of a nature which could not be laid before the arbitrator. The Com- mittee agreed that the words of the clause relating to the previous consent in writing of the Governor "should be allowed to stand without amendment, but were also understood to be of opinion that the Governor's decisions in such matters should, in any contract, be excluded from the operation of the arbitration clause.

The next point discussed was the inclusion of the words*" directly or indirectly controlled by foreigners or foreign corporations." Mr. Cox suggested that the words" directly or indirectly" might be omitted; but Mr. Grindle objected on the ground that importance was attached to the phrase, which was valuable as long as any alteration in the capital of the Company might conceivably be held to affect the principle of British control. He had been assured that it was possible to make provision against indirect control, though he did not pretend to understand how it could be done. Mr. Cox said that the clause provided that the directors shall be British subjects, but Mr. Grindle considered this safeguard insuflicient, in- stancing the case of the Trinidad Asphalte Company, the board of which comprised a number of British directors, although, as a matter of fact, the shares were mainly held in, and the company controlled from, Philadelphia. Mr. Ezechiel suggested that, in a few special cases where the shares in a company are divided up by agree- ment among other companies in certain proportions, it might be possible to preserve those proportions by providing that no transfer of shares should be allowed without the consent of the Governor; but he did not see how a provision of this nature could be acted upon in the ordinary case of a company the shares in which are held by individuals. Mr. Ommanney considered that it was impossible to define the objects of the words, and said that he favoured the term embodied in the draft clause as it was so wide. Mr. Ellis considered that the real importance of securing that the shares, and hence the voting power, should not fall into foreign hands, lies in the fact that if the company puts forward a claim against the Government it cannot be prosecuted by diplomatic means. Mr. Grindle thought that the im portance of the matter depended on the objects of the concession; but, in support of his contention, Mr. Ellis instanced the case of certain claims against the Govern- ment of Sierra Leone, amounting in the aggregate to a large sum. These claims had been rejected; but among the claimants were two United States citizens, and their claims were now to be included in the schedule to the Pecuniary Claims Con- vention with the United States; and if the decision should be adverse to the Colonial Government it would be difficult to refuse compensation to the remaining claimants. Mr. Grindle said that, as regards the oil concessions, the intention was to prevent the Standard Oil Company from gaining control, and that it was also desired that, during any time of strained relations which might or might not lead to war, the oil should be kept under the control of the Admiralty so that the companies might not be subsidised to restrict their output. He did not think that it would be a sufficient safeguard if, as suggested by Mr. Stubbs, provision were made that the concession should terminate if not worked. The Committee then agreed to the retention of the words "directly or indirectly controlled."

Memorandum or

Mr. Ommanney enquired whether it was desired that the the Articles of Association" or the " Memorandum and the Articles of Association should provide that the company shall be and remain a British company (see lines 3-5 of clause as printed). Ie considered that the clause as drafted afforded ample protection, and pointed out that, whereas an alteration of the Articles of Association could be made by resolution, it was necessary to obtain the consent qf the Court to an alteration in the Memorandum. In the latter case a question of expense would arise. It was suggested that in the case of a new company the provision might apply to both the Memorandum and Articles, but that, as regards an existing company, the alternative should be allowed. Finally the Committes agreed that, in

respect, the clause might stand as drafted.

Mr. Ezechiel then raised the point whether it was desired that all or only a majority of the directors in addition to the chairman should be British subjects. Recent concessions had varied in this respect and it was pointed out that in some cases, eg, the Falkland Islands l'eat Concession, it was not practicable to limit

• Line of clause as printed in No. 1.

† Lines 6 and 7 of clause as printed in No. 1.

11

the directorate entirely to British subjects; and the Committee agreed that the phrase in question should stand as drafted, but that it could be adapted to suit the circumstances of any particular concession.

Finally it was Resolved that :—

14

The Committee recommend that the terms of the Clause drafted by the Solicitors to the Crown Agents for the Colonics should be accepted with- out alteration; but that, in cases in which it is included in concessions, the question of the Governor's consent to alterations in the Memorandum or Articles of Association should, in any contract, he specifically excluded from the operation of the Arbitration Clause."

(B) Standard Arbitration Clauses.-In the absence of any specific ease-of complaint question having been raised in regard to the nature of these clauses, and having regard to the fact that the nature of the clauses must necessarily vary to meet the circumstances of particular concessions, the Committee Resolved that :—

It is agreed that there is, at the present time, no need to consider the question of drafting a standard form of clause dealing with Arbitration."

H. T. A.

26th April, 1911.

The foregoing minutes have been circulated for approval. One alteration bas been made, at Mr. Ommanney's suggestion, and with Mr. Cox's concurrence, in the resolution relating to the Arbitration Clauses.

3rd May, 1911.

9th May, 1911.

16367

(Confidential.)

No. 8.

H. T. A.

II. BERTRAM COX.

INDIA OFFICE to COLONIAL OFFICE.

(Received May 18, 1911.) [Answered by No. 11.]

India Office, Whitehall, London, S.W.,

17th May, 1911.

SIR,

IN continuation of my letter of the 23rd February last,* on the subject of the provision in leases of Government concessions in India for securing that concession- aires should be of British nationality, I am directed by the Secretary of State for India to forward, for the information of Mr. Harcourt, and for consideration in connection with the general question of the similar provisions in Colonial leases, a copy of a letter from the Government of India, No. 22, Commerce and Industry, dated 27th April, 1911, and to invite attention to the request that the enclosures of the letter may be treated as confidential."

Enclosure in No. 8.

(No. 22 of 1911.)

MY LORD,

I have, &c.,

ED. S. MONTAGU.

Government of India, Department of Commerce and Industry, WE have the honour to acknowledge the receipt of Lord Crewe's despatch,

Simla, 27th April, 1911. No. 20, Revenue, dated the 24th February, 1911, with which was forwarded a copy of correspondence with the Colonial Office on the subject of the method of providing

• No. 4.

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