TNAG-0643-FCO40-791-Involvement-of-Hong-Kong-in-air-services-agreements-1977 — Page 196

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5. THE FORMULATION IN PARA 2 ABOVE IS MOST UNDESIRABLE FOR THE REASONS GIVEN IN PARAS 1 AND 3 ABOVE. FURTHERMORE IT WOULD RESULT IN A DEPARTURE FROM ONE OF THE PRINCIPAL PURPOSES OF AN ASA WHICH IS THE GRANT OF RIGHTS.

6. IF YOUR INTENTION IS AS EXPRESSED IN THE SECOND SENTENCE OF PARA 4 ABOVE THE ONLY POSSIBLE FORMULATION WOULD HAVE TO BE EXPLICIT AND WOULD THEREFORE NOT ACHIEVE THE OBJECTIVE EXPRESSED IN THE SECOND SENTENCE OF YOUR PARA 1A,

7. YOUR PARA 5A. A PROVISION IN A PUBLISHED EXCHANGE OF NOTES IN EFFECT SETTING OUT THE AGREEMENT OF THE PARTIES TO REPLACE THE OLD BERMUDA PRINCIPLES BY AGREED CAPACITY WILL DEPRIVE THE 1953 EXCHANGE OF NOTES OF ANY APPLICATION SINCE THE PROVISION THEY INTERPRET WILL BE SUPERSEDED.

8. ON RECEIPT OF YOUR COMMENTS ON THE FOREGOING WE WILL ADVISE FURTHER.

CWEN

FILES.

MAED.

SEAD. HKFGD.

MR BURROWs,

MR. MURRAY

[COPIES PASSED TO CADIDOT]

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