TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 25

Reference

CONFIDENTIAL

The natural meaning of the relevant words, read in

,

ཎྞཾ་

context is 'the sterling which you purchased during

March(un 'er the belief, which we do not admit to be

correct, that by making amends you could claim that your

breach had been 'accidental' however close to the wind

( you had been sailing) and which you needed to purchase

to bring yourself over MSP by the end of March when

you had allowed for aŭtomatic changes in value and

accruals to your holdings! Hong Kong is in effect

claiming to misinterpret the accidental breąch provision

in yet another respect and the onus is on her to show

that this further misinterpretation must have been

known to the parties when the modified settlement basis

was drafted.

(3) The modified settlement basis, read as a whole,

should have made quite clear to Kong Kong that automatic

changes in value and accruals were not to be disregarded

in computing the amount of sterling that should be bou hit

in time for the end of March. The last sentence

stressed that end March values are the relevant ones

for the purpose of the modified settlement basis, and

above there is express mention of 'sterling interest

received during March which is maintained in sterling'

This should have made it quite clear that the purchases

required in time for the end of March were to be calculated

after these two elements had been taken into account.

I hope you feel that I am sitting on the fence with

sufficient equilibrium for your purposes.

CONFIDENTIAL

Zihen funza 15 July 1974.

DD 143177 219242W60m 4/73 GM 3643/2