TNAG-0103-FCO40-139-Briefs-and-background-notes-for-Lord-Shepherd-1967 — Page 25

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7. E.C.G.D. will require to bo satisfied as to the torms of the loan

agrooment and the supply contract. This is implicit in H.M.G's undertaking

to share in the guarantee on a commercial contract otherwise acceptable to

E.C.G.D. The points mainly concorn the adequacy of provisions for termination

of contract, arbitration in case of dispute, adequate definition of

rosponsibilitics and amounts involved, and the interlocking or compatibility

of the two contracts.

8.

Additionally, H.M.G. will wish to be satisfied that the torms are not

so oncrcus to the supplier as to be incapablo of fulfilment or which could only bo fulfilled at considerable hardship. As guarantors H.M.G. and the

Government of Hong Kong have the samo interest in this regard noither wish to force the contractor into bankruptcy during construction. As shareholders tho Hong Kong Government hovo slightly different interests and H.M.G. hope

that in the former capacity the Government of Hong Kong will use their

influenco with the shareholders to secure reasonable torms.

CONFIDENTIAL