INTERNATIONAL COURT OF JUSTICE '7

PLEADINGS, ORAL ARGUMENTS, DOCUMENTS

ANGLO-IRANIAN
OIL Co. CASE
(UNITED KINGDOM v. IRAN)

MÉMOIRES, PLAIDOIRIES ET DOCUMENTS

AFFAIRE DE
L'ANGLO-IRANIAN OIL Co.
(ROYAUME-UNI C. IRAN)
Al1 rights reserved by the
International Court of Justice
Tous droits réservés par la
.Cour internationale de Justice
 This volume should be quoted as :
I.C.J . PZeadings, Alzglo-Ira~zian Oil Co. Case (United Kingdom
v. Irart)

Le présent volume doit être cité comme suit :

C . 1. J . 1Mémotres, AQnire de l ' ~ n ~ l o - ~ r u nOil
i a nCo. (Royazc~ne-Ufii
G. Iran)
 ANGLO-IRANIAN OIL CO. CASE
(UNITED KINGDOM v . IRAN)

AFFAIRE DE L'ANGLO-IRANIAN OIL CO.

(ROYAUME-UNI c. IRAN)
 INTERNATIONAL COURT OF JUSTICE
- -.. -.*.

PLEADINGS, ORAL ARGUMENTS, DOCUMENTS '

ANGLO-IRANIAN
OIL Co. CASE
(UNITED KINGDOM v. IRAN)
 . COUR TNTERNATIONALE DE JUSTICE
--.,- .... . . .. ---.. ,, .-

MEMOIRES, PLAIDOIRIES ET DOCUMENTS

AFFAIRE DE
L'ANGLO-IRANIAN OIL Co. ,

(ROYAUME-UNI C. IRAN)

ARR&T DU 2 2 JUILLET 1952

 PART 1

APPLICATION INSTITUTING PROCEEDINGS,

REQUEST FOR THE INDICATION OF INTERIM
MEASURES OF PROTECTION AND PLEADINGS '
(MERITS AND PRELIMINARY OBJECTION)

PREMIERE PARTIE

REQUÊTE INTRODUCTIVE D'INSTANCE,

D E m N D E EN INDICATION DE MESURES
CONSERVATOIRES ET PIECES DE LA
P R O C ~ D U K E&CRITE
(FOND E'll EXCEPTION PKRLIMTNAIRE)
 THE UNITED KINGDOM AGENT TO THE REGISTliAR
O F THE COURT

OFFICE,London, S.W.
FOREIGN I.

26th May, 1951.

Sir,
1 have the honour t o rcfer to the declaration made by the United
Kingdom and by Iran accepting the Optional Clause provided
for in Article 36 (2) of the Statute of the International Court of
Justice, and, under the jurisdiction thereby conferred upon the
Court, t o submit, in accordance with Article 40 (1) of the Statute
and Article 32 ( 2 ) of the Rules of the Court, an Application insti-
tuting prûceedings in the name of the Government of the United
Kingdom of Great Britain and Northern Ireland against the
Imperid Government of Iran in the following case :
SIorgmcw 01 2. On ,the 29th April, 1933, a Convention (a copy of which,
{W~S
containing nlso an English translation prepared for the use of the
Company-, is annexed to this Application as Annex A l ) was con-
cluded between the Imperia1 Government of Persia (now the Im-
ycrid Govcriirricrii of Irari) miil ilic Anglu-Pcrsia~iOil Cornpaiiy,
Liniitcd [now the A~iglo-IranianClil Loinpaliy, Limitccl), a cornpaiiy
incorporattd in the United Kingdom. This Conventioa (licreiilafrer
clcscribed as the Convention), after being ratified by the Persian
BTajlis ari the 23th May, 793.3, and rifter receiving the Trnperial
Asscrit ori Lhc zgtli M;ly, Tc)33, i;;irne irito fort;e i,ri the 29th May.
15333. In Articlc I of the C&nvciition tlic Inipcrial Covcranicnt: of
l'ersia grailted to thc Loiiipany "le droit cxclusif, .dans lc territoire
de 1:i Conce5sion [which was defineci in Article 2 of thc Conventiori].
da reclierçlier et 11'~xtr:iirl:le pGtrole, ilinsi cpie de raffiner (iiz traiter
dc toute autrc ~nanihrcet rcridrc Iirolirc I)olIr le cr.irliriicrce le
petrolc obtei-iu par cllc". Tlic Coinpsriy wss slso graiitcd, through-
w t Persia, "le droit non cxclusif de transporter le pétrole, de le
raffiner ou traiter de toute autre manière et de le rendre propre
pour le commerce, ainsi que de le vendre en Perse et l'exporter".
'
In A d i d e 26 of the Convention it was provided that "Cette Conces-
sion est octroyée à la Compagnie pour la période commençant le
jour de son entrée en vigueur et expirant le 31 décembre 1993.
"Avant la date du 31 décembre 1993,cette Concession ne pourra
prendre fin que dans le cas où Ia Compagnie renoncerait à la Conces-
l T h e text of the Convention is also reproduced in the Leaguc of Nations Oficial
Jortrwa[ for August-December, 1933. Annex 1467.
9 APPLICATION 1NSi'~I'U'iINC PXOÇEIIUINCS (26 V 51)
sion (art. 25) oii daris le cas oii le trihiinil arbitral' déclarerait
aiinu1i.e la Conccssioii par siiite de fiilitl: de lit Cumptignie d;iris
1'cxCcution dc la présctite Cotivcritio~i.
"Se scroiit coiisidCrCs coiriiiic faiilcs dans ce seris (lue les cas
suivants :
a) si une somme quelconque, allouée à la Perse par le tribunal
arbitral, n'a pas été payée dans le délai d'un mois à compter
de la sentence ;
bJ si la liquidation volontaire ou forcée de la Compagnie est
décidée.
"En tous autres cas d'infraction à la présente Convention par
l'une ou l'autre partie, le tribunal arbitral fixera les responsabilités
et en déterminera les conséquences ...."
In Article 21 of the Convention it was provided that "Les parties
contmctantes déclarent baser l'exécution de la présente Convention
sur les principes réciproques de bonne volonté et de bonne foi
ainsi que sur une interprétation raisonnable de cette Convention" ;
ais0 that "Cette Concession ne sera pas annulée par le Gouverne-
ment et les dispositions y contenues ne seront altérées ni par une
législation générale ou spéciale future, ni par des mesures administra-
tives ou tous autres actes quelconques des autorités exécutives."
In Article 22 of the Convention it was provided that "tom
différends de nature quelconque entre les parties" should be settled
by arbitration ; that the party requesting arbitration should notify
the other party in writing ; that each of the parties should appoint
an arbitrator and tliat the two arbitrators, before proceedirig t o
arbitratioii, slioiild aliliriirit ari umpire. It was also provided iii the
same artide that, iii thc cvciit of a failiirr tu agree within two m o n t h
r i r i the p r s o n of the uiiipire, the lattcr slioiild be numiri;rtecl, : ~ the
t
reili~wLof either of the parties, by thc Prcsiderit uf tlie Peririaiieiil
Coiirt 4ji Triterriational Justice ; that, if oiie of tlie 1i;irlics ilid noi
appoint ils arliilrÿtor or ~ l i r iiot
l :idvise the otlicr parly of ils aplioùit-
ment. ïvithiii sixty days of liaviiig reçeivrd notification of the request
frir sirbitration, the othcr party shoiilil 1i:ive the right to recluest
tlie Pwsident of the l'crinaneiit Coiirt of 1riternation;iI justice to
iioriiiriate ;L sole tirbitrator; that tlic proce~liirt:of ;~rhitr:ltinn
should bc tliat followcd. a t llic tirne of the arbitration, by the Per-
manent Court of International Justice ; and that the award shodd
be based on the juridical principles contained in Article 38 of the
Statutes of the Permanent Court of International Justice.
3. The effect of Article 22 of the Convention was thereby to
exclude from the jurisdiction of the Persian courts "tous différends
de nature quelconque entre les parties" and to make the form of
arbitration laid down in that article the exclusive legal remedy
open t o either party in the event of such differencesarising between
them.
See .%nicle2 2 of the Convention, discussed below.
 IO APPISCATION INSTITUTINC YI<OÇEEr)lNGS (26 V 51)
4. 011 the 15th March, rggr, :mrl LIIC 20th Marçli. 1951 ', the
Iratiiaii hlajlis and the 1r:iriiari Scriatc rcspectively approvcd a
Singlr ,Article r.niinci:ltirig Lhc pririciple of thc iiatiorializatioii of
t h e riil iridiistry in Iran, and this Single Article subse~lueiitlyrecrived
the Imperia1 assent, dated the 1st May, 19j1. On the 26th April,
19jr, the Majlis Oil Cornmittee prepared a Bill (resolution) "for
carrying out oil nationalization" and this Bill was passed by the
M a j h on the 28th April, 1951. On the same day (28th April, 1951).
the Anglo-Iranian Oil Company, Limited, protested against the
proposed action to the Imperial Government of Iran without effect.
(A copy of this protest is filed as Annex B to this Application.)
The Bill rrras passed by the Senate on the 30th April, 1951, and it
then received the Imperial asscnt, dated the 1st May, 1951. This
Act (hereinafter referred to as the Iranian Oil Nationalization Act
of the 1st May, 1951, and a translation of which into English k
filed as Annex C to this Application) involves the establishment of
a "mixed Board composed of five Senators and five Deputies,
elected by each of the two Houses, and of the Minister of inance
or his deputy" (Article 1).It also obliges the Imperial Government
of Iran "to dispossess a t once the former Anglo-Iranian Oil Company
under the supervision of the mixcd Board" (Article 2). The Act
further states that : "Whereas, with effect from the 29th Isfand
'1329 (20th March, ~ g j x )when , nationalization of the oil industry
was sanctioned also by the Senate, the entire revenue derived from
oil and its products is indisputably due to the Persian nation, the
Government is bound to audit the Company's accounts under the
supervision of thc mixcd Board, which must also closely supervise
exploitation as from the date of the implcrricntition of this laiv
until ttic :11)1ioiritrncrit01 an cxccutivc body." (Article 4.)

j. On the 8th May, 1g51, bklieving thnt the Irtinian Oil Natioii-
alization Act of the 1st May; rggr, ;imouiit.ed. or1 the part of I r a n .
tu ;i unil;iter;~l;mniilrnent. or altcratinri of tlic tcrtiis, of 1:hc Con-
v ~ ~ i t i contr;iry
o~i to tlic cxprcss tcrrns of Articles 21 ariil zG of the
Convention, wliicli had bccii ratiricd by the Majlis, tlic Ariglo-
IraniruiOiiCoriipariy, Liniited, which had, asindicatrd in p a r a g r a ~ h 4
' abriva, protestrd ;igaiiist the pro1iirserl :~ctiori williout effect, hled
a notice requesting that its difference ivith the Imperial Government
of Iran be submitted to arbitration, in accordance with the terms
of Artide 22 of the Convention. (A copy of this notice is filed as
Annex D to this Application.)
6. On the 20th May, 1951, the Iranian Minister of Finance
' In the I~nperial assent to the Iranian Oil Xationaliration Act, dated the
1st X ~ J :1951,
. the 17th Dlarch, 1951, is given as the date of the Single Article.
This wa5 in fvct the date on which the Scnate Standing Committces on Farci,-
-4ffairs and Finance reachcd agreement on the Single >\rticle.
II . ~ ~ ~ L I C M ' I OINSTITUTING
X PROCEEDINGS (26 v 51)
iurote a Icltcr to "Mr. Rrpresentative of the foriiier Atiglo-1r;uii;in
Oil Loiiipaiiy" (a trnrislalion of ahich iiito Eiiglish is filcd ~5
Aiiiicx E to this hli~ilic;~tiori 1) in which it was stated that "The
ri:itiunalizatioii of the oil industry .... is riot sul~jrctto arbitration.
and no international authority is qualified to investigate this
marter" : and also that "The Persian Government in the present
circumstanccs has no other duty except the enforccment of the
above-mentioned law, and does not agree whatsoever with the
contents of the letter of the former oil company regarding reference
to arbiiration". The Minister of Finance underlincd the deter-
mination of the Imperial Government of Iran to reject a settlement
by arbitration by inviting "the former oil company" to appoint
reprcsentatives with a vie\\. to implementing the nationalization
law. I t is plain from the terms of the Minister of Finance's letter
that the position of the Imperial Government of Iran is that the
execution of the Iranian Oil Nationalization Act of the 1st May,
rgjr, is to proceed and that there is no remedy to which the Com-
pany can have recourse in order to arrest its execution. Aiter
receiving and considering this letter, the Anglo-Iranian Oil Com-
pany, Limited, despatched a communication to the President of
the Court requesting him, in accordance with paragraph (d) of
Article 22 of the Convention, toappoint a sole arbitrator to decide
of h a n .
.
the disvute between the C o m ~ a n vand the Imvenal Government
A

7. An attempt has also heen made to reach a frienùly settlement

between the Imperial Government of Iran and the Government of
thc United ICingdom through thc diplornatic chaniiel. On thc
19th May, 19.51, His Hritaiiiiic Ifajcsty's Arrili;~ss;~ilor in 'Cehran
delivcrcil a note to the Iinperial Guvcriiriicrit of Iran expressing
tbr holie tli;~ltlic 11rol)lem could br solvcd by iicgotiatioii Li1 ttii?
s;itisfaction of al1 curiccrrictl ; ~ n doffrring, on behalf of thc Govcrri-
mcrit of the United ICirigdorri, to scrid ;L mission forthn7itli to
Tchren to discuss tlic tcrtns of a ricw agreement. (A copp of this
notc is iilrd as Aiiiicx F to this Applicaliori.) A rc~ilyto this note
hns iioi y1.1 I~ccnrecrivrd froiii the Iiiiperial Govcrtiriiciit of Irxn,
liiit. iiistcod a furtlicr lcltcr, ;~ddrrsïrdhy the Iranian Ministcr uf
Firiance t o "Mr. Kcpreseritati\~cof tlic former Anglo-Jraninn Oil
Coiiipany;", was delivered on the 24th May, 19j1. Iri this letter
(a translation of which into English is filcd as Annex G to this
Application) the Minister of Finance stated that, if the Company's
reprejentatives did not attend within six days, the Imperial Govern-
ment of Iran would proceed to implement the nationalization la\%..
I t vould appear, therefore, to the Government of the United King-
dom that the Imperial Government of Iran are not responding to
the request of the .Government of the United Kingdom that the
problem should be settled by negotiation.

' l e Annex E, p. 40, footnote r , and Part IV. Correspondence

12 APPLICATION I N S T I T U T I Z G PKOCEEDINGS (26 V 51)

8. This atlcrript to rcach a friendly settlcrricrit through direct

nii~uiiaiioiisbctwccii the two Governrricrits liavirig- provcd abortive,
tlicrc noiv cxists a dispute l)i:tuv+en tlic Itri]icrial Goverlimerit of
Iran and the Government. of tlic Uriitcd Kiiigdom-a dispute wliich
the Government of the United Kingdom have deemed appropnate
t o submit to the Court.
9. The Governmcnt of the United Kingdom in submitting this
dispute to the Court claim that :-
{a) The Imperial Goveniment of Iran are not entitled to refuse
t o submit the dispute between themselves and the Anglo-
Iranian Oil Company, Limited, to arbitration, as procided
for in Article 22 of the Convention concluded in 1933 between
the Imperial Government of Persia and the Anglo-Persian
Oil Company, Limited ;
(b) By the terms of the Iranian Oil Kationalization Act of the
1st Rlay, 1951, the Imperial Government of Iran haxre
purported to effect a unilateral annulment, or alteration of
the terms, of the Convention concluded in 1933 between the
Imperial Government of Persia and the Anglo-Persian Oil
Company, Limited, contrary to the express terms of Arti-
cles zr and 26 of that Convention;
{cj I n so purporting to effect a unilateral annulment, or alter-
ation of the terms, of the Convention concluded in 1933
between the Imperial Government of Persia and the Anglo-
Persian Oil Company, Limited, contrary to the express ternis
of Articles 21 and 26 of that Convention, the Imperial Govcrn-
rncrit ( i f Iraii Iiavc thereby ciimrnitletl a wroiig agaiiist tlii:
4nglo-Iraiiiaii Oil Conip;iny, T.iiriitcd, a British natiurial :
(d) In rcjcctiiig arbitration, the rncaiis providcd by Article 2 2
of the Conventiori for scttliiig "tous différends de rialure
r~iidlçoriili~~ctitrc Ics parties", idter tlic Atig1o:Iraiiian Oil
Cntril>aiiy,Liiiiitcd, had fileil a tioticc iri writiiig reqlirstirig
orl>itr.~tioii, iii accortl;irice witli thc ~irovisioiisof that iirtiçlc,
the Iiiiperial Goverrirncnt of Iraii have denied, or are ;~llcinpt-
ing to deny, to tlic Coinpaiiy the exclusive l e p l rcniedy
expressly ~irovidcdfor in the Ciiriveritioti ;
( e j Ili piirportiiig uiiilater;illy to ;~ritiul,or alter the tel-111s( i f , Lhc
Convention with the Corripatiy, and in denying, or iri itlempt-
ing to deny, to the Company the exclusive legal remedy
expressly provided for in the Convention, the Impcrial
Government of Iran have been, or will, if they persist in
the denial of this remedy, be responsible for a denial of
justice against a British national ;
(/) By their conduct as set forth in (b) to (e) above, the Imperial
Government of Iran have thereby treated a British national
in a manner not in accordance with the pnnciples of intema-
tional law and have, in consequence, committed an intema-
tional wrong against the Government of the United Kingdom.
 13 Ai'l'LICATION TNSTTTUTING PROCEEDINGS (26 V 51)

i d IO. Trt tlte siiliriiissioiis of the Govcrniiiciit of theUnited 1<ingdom,

@ IhC Colcri ihc Court lias jurisdictioii to determine this dispute hrtween t h r
Govcriiineiit of the United Iiiiigdom antl the 1rnperi;ll Govcrrirne~it
of Ir;in for the rr;iïori that it i s a dispiitc çovcrcd I-ry tlic tcrinsof the
declaration, deposited with the Secretariat of the League of Nations
on the 19th September, 1932, in which the Imperial Government of
Persia accepted the jurisdiction of the Permanent Court of Inter-
national Justice in conformity with Article 36 (2) of the Statute of
that Court. By the terms of that declaration, the Imperial Govern-
ment of Iran are bound to accept, on the basis of reciprocity, vis-à-
vis any other govemment, the jurisdiction of the Court, "sur tous
les différends qui s'élèveraient après la ratification de la préxnte
déclaration, au sujet de situations ou de faits ayant directement ou
indirectement trait à l'application des traités ou conventions accep-
tés par la Perse et postérieurs à la ratification de cette déclaration.
exception faite pour :
a) Les différends ayant trait au statut territorial de la Perse,
y compris ceux relatifs à ses droits de souveraineté sur ses iles
e t ports ;
6 ) Les différends au sujet desquels les parties auraient con\-enu
ou conviendraient d'avoir recours à un autre mode de règle-
ment pacifique ;
G) Les différends relatifs à des questions qui, d'après le droit
international, relèveraient exclusivement de la juridiction d e
la Perse."
II. In the submissioiis of the Goveriimeiit of the United Kingdr)m.
this dispute between the Govarnment of ttie United Kingdom and
the Imperia1 Government uf Iran is a (lisliutc covcrcd by the terrns
of the decl;ir;ition. depositctl by tlic Impcrial Govcriiiiieiit of Persia
witli flie Secretariat of the Lcague of Nations on the 19th Septem-
bcr, 1932. bccause
(a) '1-he dispute has nrisrn ";ipr&s 1;1 r;itification (lc la prkcntc
dklaration" (paragrapti r z below).
(b) The dispute is "a11 sujct dc situations ou dc faits ayant direc-
tement oii iridircctcrnctit trait à l'application des trait& ou
conventions acceptés par la Perse" (paragraph 13 liehiw).
( E ) The dispute is "au sujet de situations ou de faits" which are
"postérieurs àlaratification decette déclaration" (paragraph 12
below).
(d) The exceptions set forth in the aforesaid declaration are not
applicable to the present case. In particular, the question
whether or not a State has committed a breach of an intèr-
national obligation is not, and cannot be, a question exclusivelj:
within the domestic jurisdiction of that State.
 12. The dispute is ;I dispiilc wliicli has arisen ";ipr&s la raiiï-
cation de la ~>rEscritcilCclaration" (19th Saptcrribcr. 1932), and is
al50 ;i dis~iiitc"au sujet de situations oii de faits" which are "pmttr.
rieurs h h ratification de cette dbdaratiori" (xgth Septomber. 1932)
in that both the dispute and the facts out of which it arises are ail
consequences of and subsequent to the Iranian Oil Nationalization
Act of the 1st May, 1951.
13. The "traités ou conventions acceptés par la Perse", which
are directly or indirectly involved by the situations and facts out
of which the dispute anses, are of two kinds :

(la)First, there are certain treaties and conventions by which

Iran is obliged to accord to British nationals the same treat-
ment as that accorded to nationals of the most favoured
nation, and there arc also certain other treaties and conyen-
tions, by which Iran is obliged to treat the nationals of other
States in accordance with the principles of international
laur (paragraphs 14-1j belou,).
(b) Secondly, there is a direct treaty obligation between Iran
and the United Kingdom by which Iran is obliged to treat
British nationals in accordance with the principles of inter-
national law (paragraph 17 below).
Further. the Convention concluded in 1933, by which the
Concession was granted, may, having regard to the circumstances
in which it was made, be held to be a "convention" within the
tricaiiiiig of that expressiciri in thc declaratiori iIcliositcd by the
Iriiperial Governmerit of Pcrsia relating to Arliclc 36 (2) of the
Statiite of the Coiirt.
14.The trcatics and converilions obliging Iran tu accord to
British natioiials the same trcatiiicnt as that ;iccor<lcilto iiatioiials
of the most favoured iiatioii (rcferretl to iri Ix~ragraph13 (a) ;ihrive,)
are :
(u) The Trcaty coiicluded at. Paris bct\z8cciithe Unitt:d Kiiigdom
aiid Pcrsia on the 4th March, 18j7, Article TX of whch
i'cads : "The Higli Ciiritractirig l'arties erigagc that, in the
cstablishiiient and recognition of Consiils-Gcricral, Consuls,
Vice-Consuls, and Consular Agents, each shaU be placed in
the dominions of the other on the footing of the most favoured
nation ; and that the treatment of their respective subjects,
and their trade, shall also, in every respect, be placed on
the footing of the treatment of the subjects and commerce
of the most favoured nation."
(b) The Commercial Convention concluded a t Tehran betirreen
the United Kingdom and Persia on the 9th February, 1903,
Article II of which reads:
 " .... II est formellcnient stipulé que les sujets et les impor-
tations britanniques en l'erse, ainsi que les sujets persans
et les importations persanes di~nsl'Empire brit;~rinirlue,
continurront i jouir sous toiis les rtrpports do rkgirnt: ilc
la nation la plus favorisée...."
15. The treaties obliging Iran to treat the nationals of certain
other States in accordancc with the principles of international laiv
( a h referred to in paragraph 13 (a) above) include the following :

(B) The Treaty of Friendship and Establishment coiicluded

a t Tehran between Pcrsia and Egypt on the 28th November.
1928, Article 11' of which provides that the subjects of each
of the High Contracting Parties shall enjoy "la plus constante
protection et s6curité quant à leurs personnes, biens, droits
et intérêts, conformément au droit commun international".
(b) The Establishment Convention concluded a t Tehran between
Pcrsia and Belgium on the 9th May, 1929, Article 1of which
provides that "Les ressortissants de chacune des hautes
parties contractantes seront, sur le territoire de l'autre.
reçus et traités, relativement à leur personne et à leurs biens.
conformément au droit commun international. Ils y jouiront
de la plus constante protection des lois et des autorités
territoriales pour leur personne, leurs biens, droits et intérèts."
(cj The Establishment Convention concluded a t Tehran between
Persia and Czechoslovakia on the 29th October, 1930,
Article 1 of which provides that "Les ressortissants de chacun
des l?t;~t.s i:ontr;ict;mt.s seront acciieillis et traitbs sur le
Lcrritoirc dc l'aiitrc fit;lt, en cc qui coriccrric lcurs personlies
ct lciirs liicris, d'aprks lcs priiicipcs ct la pratique du droit
coiiiniuri intcriiatiorial. Ils y jouiront de la plus const.;inte
protection des lois et ;~utorit.ksterritori;lles 1)oiir lcurs ~ i c ~ - -
ço~iricset pour lcurs bicris, droils cl iritCrets."
(d) Thc Trcaty of Fricridship, Establishriicrit and Coinmerce
coiicludcd a t Tchraii hctween l'ersia and Deninark un the
20th k-ebriiary, 1934, Article I V of which pn)vidcs lhot
4,
LH ressortissarils dc cliacuric ilcs liautcs parties contrac-
Ia~ilcsseront, sur lc tcrritoirc de l'autrc, reçus et traites,
relativement à leurs personnes et à leurs biens, conformément
a u s principes e t à la pratique du droit commun international.
Ils y jouiront de la plus constante protection des lois et des
autorités territoriales pour leurs personnes, et pour Leurs
biens, droits et intéretç'."
( 8 ) The Establishment Convention concluded between Persia
and Switzcrland a t Berne on the 25th A ~ r i.l1. ~ 1..4 Article
<-
. 1
of which provides that "Les ressortissants de chacune
des hautes parties contractantes seront accucillis et traités
sur le territoire de l'autre partie, en ce qui concerne leurs
16 API'1,ICATION I N S ï I T U 7 1 N Ç YKUCEEUINGS (26 V 51)
persoiincs ct Icurs liicns, d't~prtsles principes et la pratique
du droit coininiin iiitertiatioiid. Ils y joiiin)nt rlc la plus
cunstante protectioii des lois ct aut0ritl.s icrritori;iles pour
lc11rs 1)crsonnt.Set pour leurs biens, droits ct iritCr&ts."
(i) The Establishment Convention concluded a t Tehran between
Persia and Germany on thc 17th February, 1929, Article 1
of which provides that "Les ressortissants de chacun des
Rtats contr?ctants seront accueillis et traités sur le territoire
de l'autre Etat, en ce qui concerne leurs personnes et leurs
biens, d'après les principes et la pratique du droit commun
international. Ils y jouiront de la plus constante protection
des lois et autorités territoriales pour lcurs personnes, et pour
leurs biens, droits et intérets."
(g) The Establishment Convention concluded a t Tebran between
Persia and Turkey on the 14th March, 1937, Article 1of which
provides that "Les ressortissants de chacune des hautes parties
contractantes seront, sur le temtoire de l'autre, reçus e t
traités, relativement à. leurs personnes et à leurs biens, confor-
mément au droit commun international. Ils y jouiront de l a
plus constante protection des lois et des autorités territoriales
pour leurs personnes et leurs biens, droits et intérêts."
(h) The Exchange of Notes between Persia and the United States
constituting a modus vivendi regarding friendly and commer-
cial relations, dated the 14th May, 1928, in which the Acting
Persian Minister for Forcigii Affairs stated that "A tlater du
I O mai 1928, les ressortissants des États-Unis d'Amérique en
Perse seront admis et traités conformément ailx règles et
pr;rt.iques du droit coiniiiuii iiitcriialiorial et sur I;r base d'iine
1)arf;lite réciprocité."
(il The Excliaiigc nf Notes hetween I'ersia aiid tlic Ncthcrlarids
constitiitiiig a rnorlt~snioendi rrgarding friciidsliip aiid cuni-
merce dated the 20th Juiic, 1928, in wtiich the Acting l'ersian
Mi~iistcr for Foreign Afiairs statcd: "T.es ressortiss;i~ils
dcs Pays-Bas sur le territoire dc la Pcrse y seront ;~drnisci
traitCs coiiforrn<irnerit;lux règles et pratiqucs du droit coiriniun
international."
( j ) Tlir Exchi~ngeof Notes bctwccn Pcrsi;~tirid Italy, constitut-
irig ;r nzodzts viv~?!,diin inattcrs of cornrnerce ;~ridjurisdictiun
dated the 25th June, 1928, in which the Acting Persian Minis-
ter for Foreign Affairs stated: "Les ressortissants italiens
seront admis et traités sur le temtoire persan conformément
aux règles et pratiques du droit commun international sur la
base d'une parfaite réciprocité."
16. .%s shown in paragraphs 14 and 15 above, Iran has accepted
treaties and conventions binding her to accord to British iiationals
the sarne treatment as that accorded to the nationais of the rnost
favoured nation and has aiso accepted treaties and conventions
I7 APPLICATION INSTITIJTING PROCEEDINGS (26 V 51)
binding her totreat thc iiatioiials of ccrtaiii otlicr States in accord-
arii:c witli the principles of international law. I t thcrefore followc,
in tlic suli~tiissioiiof tlie G!)vrrriment. of the United Kingdoin, Lliat
Iran has acccptctl Lrcaties 1)iridiriglier I o tre;it British iiatioiials in
accordance with the principles of international law.
17. As indicated in paragraph 13 (b) above, there also exists
a direct trcaty obligation, binding the Imperia1 Government of
Iran t o treat British nationals in accordance with the principles
of international law. This arises out of the fact that in an cxchange
of notes hetween the Imperial Government of Persia and the
Government of the United ICingdom, on the 10th May, 1928,
relating to the abolition of capitulations in Persia, the Imperia1
Government of Persia undertook that henceforth British nationais
in Persia "will be admitted and treated on Persian territory in
conformity with the rules and practice of international law" '.
18..4s stated in paragraph 9 above, it is the submission of the
Government of the United Kingdom that the Imperial Government
of Iran have treated the Anglo-Iranian Oil Company, Limited, a
Britijh national, in a manner which is not in accordance with the
principles of international law. This treatmerit constitutes, on the
part of the Imperial Government of Iran, not only a breach of
the rules of customary international law but also a breach of
treaty obligations accepted by that Govemnient (see paragraphs 14-
17 above). with the consequericc that that Government, in accord-
ance with the terms of thcir dcclnratioii. deposited with the
Sccrctariat of the Eeague of Nations on tlic ~ g t l iSeptember, 1932,
acccptiiig tlie jiirisdiction of the Pcriiiaiiciit Coirrl of Tritcrnatioiid
.JiisLicc in çoriformity with Articlc 36 (2) of the SLal~iteof that
Court, arc Iioiiiicl tci siibmit to the jurisdictioii of tlic International
Court of Justice in tliis caso.
79. For the reasons givcii in paragra~ilis11-18 abovc. it is tlie
suliniissiuri of the Goveriiniciit of tlic IJiiited Kingdorii tlial tlic
Court haç tlic right to rxercise jurisdictioii in Lliis case uiider
,Article 56 (2) of tlic SLaLiite of the Court, by reasoii of the declara-
tiuri daposittid by tlic Iriipcrial Goverriment of I'ersia witli the
Secretariat of the League of Nations on the 19th September, 1932.
zo. Alternatively, whether or not the Court has the right to
exercise jurisdiction in this case by virtue of the terms of the afore-
said declaration of the Imperial Government of Persia, the,Govern-
ment of the United Icingdom expect that Iran, as a Member of the
United Nations, one of the purposes of which is "to bring about by

' The ocginal text u,as in French and reads as follows : "seront admis et traités
sur le territoire persan conformément aux regles et pratiques du droit commun
international".
 18 .~YI'LICA'I'ION INSIIIU.L.lC.'C PHOCEE1)INÇS (26 V 51)
~)excrfiilme:lriï, and in cunforniity with the principlcs of justice
aiid intcr~natioiiallaw, acljiislrnciit i)r settlernerit of international
disputcs or sitilaliotis wliicli rriiglit Icad to 1)reacli uf the peace"
(Article r (1) of tlic Charter). ariil tniiiilliil of thc principle that
"legal disputes should as a general rule be referred by the parties
to the International Court of Justice in accordance with the provi-
sions of the Statute of the Court" (Article 36 (3) of the Charter).
\vil1 agree to appenr before the Court voluntarily in order t o hear
and ansiver on their merits the arguments of the Government of the
United Kingdom. (Forupn prorogatum; Corfu Channel clas6
(Preliminary Objection) ; Judgmeiit of March 25th, 1948-I.C. J.
Reports 1947-1948, page 27.) This course is ali the more incumbent
upon the Imperial Government of Iran since the dispute in a large
measure concerns the Convention concluded on the 29th April.
1933, between the Imperial Government of Persia and the Anglo-
Persian Oil Company, Limited, in which both parties declared that
they base "l'exécution de la présente Convention sur les principes
réciproques de bonne volonté et de bonne foi".
Vattcrr of rbc Zr. Accordingly, the Government of the United Kingdom açk
ckim the Court to give notice of the present Application to the Imperia1
Government of Iran in accordance with Article 40 (2) of the Statute
of the Court and, after hearing the contentions of the parties :
(a) To declarc that the Imperial Government of Iran are under
a duty t o submit the dispute between themselves and the
Anglo-Iranian Oil Company, Limited, to arbitration under
the provisions of Article 22 of Llic Cotivcntiori çciricludcd
on the 29th April, 1933, bctwccti tlic Itnpcrial Covcrriincnt
iiI Persia ;lnd the Anglo-l'ersian Oil Coinpaiiy, Liiiiitcd, and
to scccljt and carry o u t :rriy trward issiied as a result of wcti
arl-iitratioii.
(h) LIltcr~iativcly,
(i) l'o declarc tliat tlic puttirig irito effect of the Iraiiisn
Clil Nationalization Act of tlic 1st May, 1951, iii so far
as il piirports t o effect a ~iiiilatcralaiiiiultnciit. or alter;i-
tioii of the terrns. of the Convention concliided on tlia
29th April, 1933. between the Imperia1 Government of
Persia and the Anglo-Persian Oil Company, Limited.
contrary to Articles 21 and 26 thereof, would be an act
contrary t o international law for which the Imperia1
Government of Iran would be intemationally responsible ;
(ii) To declare that Article 22 of the aforesaid Convention
continues t o be legally binding on the Imperial Govern-
ment of Iran and that, by denying t o the Anglo-Iranian
Oil Company, Limited, the exclusive legal remedy
provided in Article 22 of the aforesaid Convention,
'9 APPLICATION INSTITUTINC I ~ l < O C ~ L D l N G (26
S V 51)
the lnipc!ri;bl (;overrirnerit ti;lvi+ (:ornrnittetl ;L (l(!i~i;~libf
jiistiçc cciiitr;lry to intcriiatiorial law :
(iii) '1'0 declare that the ;iforesaid Convrritii)ii c;uinot 1;~wfiilly
be ;inniilled, or its trrrns ;~ltrrrrl,by thc 1rnperi;ll Govcrii-
ment of Iran, othenvise than as the result of agreement
with the Anglo-Iranian Oil Company, Limited, or nnder
the conditions provitled in Article 26 of the Convention ;
(ir-) l'o adjudge that the Imperia1 Government of Iran
should give full satisfaction and indemnity for al1 acts
committed in relation to the Anglo-Iranian Oil Company,
Limited, which are contrary to international law or the
aforesaid Convention, and t o determine the manner of
such satisfaction and indemnity.

2 2 . The Goveriiment of the United Kingdom rescrve the right

to request the Court, in accordance with Article 41 of the Statute
of the Court, t o indicate any provisional measures which ought
to be taken t o protect the rights of the Government of the United
Kingdom that their national, the Anglo-Iranian Oil Company.
Limited. shonld enjoy the nghts to which it is entitled under the
aforesaid Convention.
23. The undersigned has been appointed by the Government
of the Cnited Kingdom as its Agent for the purposes of these
proceedings.
I have the hononr to be, etc.

(Signeil) ERICRECKETT,
Lcgal Adviscr to the
Foreign Oiiice.
 ANNEXES TO APFT.ICATION (A)

ANNEX A
AGREEMENT
BETtVEEN THE IMPERIAL GOVERNMENT OF PERSIA AND
THE ANGLO-PERSIAN OIL COMPANY, LIMITED,
RIADE AT TEHERAN ON APRIL zgth, 1933
[Trnnsldion]
PREAMBLE
For the purpose of establishing a new Concession to replace that
which \vas granted in 1901 to William Knox D'Arcy, the present
Concession is granted by the Persian Government and accepted by
the Anglo-Persian Oil Company, Limited.
This Concession shall regulate in the future the relations between
the two parties above mentioned.
I)EFINITIONS
The foiiowing definitions of certain terms used in the present
Agreement are applicable for the purposes hereof, without regard
t o any different meaning which inay or might be attribiited to
those terms for other purposes :
"The Government" means the Imperia1 Government of
Persia ;
"The Company" means the Anglo-Persitui Oil Cornl)aiiy,
],imiteci, ;ind ;il1 its siibordiri:lte ~(irnlsaiiies;
"Tlie Aiigln-Pcrsiaii Oil Corripaiiy. Liiiiitcd" incaiis the
t\ngln-Pcrsiaii Oil Coiripaiiy, Liinitcd, or aiiy other body
coipoiatc to which, with the consent of the Guvornmnnt
(Article z6), this Concession inight be trnnsferretl ;
"Subordin:ite Complriy" meÿris ariy coiripaiiy for wliich
the Cornpaiiy lias tlic rifilit to iioiniiiate dircctly or indirectlg-
niore thaii one-half of the directors, or in whicli tlic Corri~sariy
holds, directly or indirectly. ;r nurnlii?r iif sliarcs sufliciciil to
a s u r e it Inore thari 50 per cerit of al1 votirig rights a t the
general meetings of such a Company ;

"Petroleum" means crude oil, natural gases, asphalt,

ozokerite, as well as al1 products obtained either from these
substances or by mixingthcse substances with other substances ;

"Operations of the Company in Persia" means all industrid.

commercial and technical operations carried on by the Company
exclusively for the purposes of this Concession.
21 ANNEXES TO APPLICATION (A)

Tlie Covcriiiiiciit grants to the Conipany. on the t(!rms of tlrk

Concession, the exclusivi: right, wittiiri tlit? Icrritory of tlic Coriccs-
sion. to search for and extract petroleum as well as t o refine or
treat in any other manner and render suitable for commerce the
petroleum obtained by it.
ï h e Government also grants t o the Company, throughout Persia,
the non-exclusive right to transport petroleum, to refine or treat
it in any other manner ancl to render it suitable for commerce, as
ir.ell as t o sel1 it in Persia and to export it.
Article 2

.4. The territory of the Concession, until December y s t , 1938,

chall be the territory to the south of the violet linc drawn on t h e
map ' signed by both parties and annexed to the present Agreement.
B. The Company is bound, a t latest by December p s t , 1938, t o
select on the territory above mentioned one or several areas of
such chape and such size aiid so situated as the Company may
deem suitable. The total area of the area or areas selected mnst not
excecd one hundred thousand English square miles (1oo.000 square
miles), each linear mile being equivalent to 1,609 metres.
The Company shall notify to the Government in writirig on
December 31st, 1938, or before that date, the area or areas which
i t shall have selected as above provided. The maps and d a t a
iicccssary to idrntify :lrid rl(:firie tlit: ;lrr;l iir ;lrcas wliicli tlic Coiripaiiy
shall ha\-t: selectoil sliall I>caltaclicil to cacli notification.
C. After Uecembrr i s t , 19138, the Ci~ml>;~riy sliall tio Iniigcr
have the riglit to scarcli for aiid exlrocl pctrolcuiii cxccpt 011 the
nrpa or arcas sclccted by it under paragraph H above, ;riid the
Lerritory of the Concession, after that date, sh;hII me;rri orily ilic
arca or arcas so selected and the selection of which sIi;~llti;ive lice11
iiotihed to the Giivi+rrirncnt; ~ ;iliovl:
s ~>roviilcil.
Avticlc 3
The Company shall have the non-exclusive right to cotistruct
and to own pipe-lines. The Company may determinc the position
of its pipe-lines and operate them.
Article 4
4 . Any unutilized lands belonging to the Go\~eriimeiit.\\.hich
the Company shall deem necessary for its operations in L'ersia and
'
T h e map annexed to the original document is not reproduced. but inuy be
reicrred t o in the archives of the Secretariat [of the League of Nations].
22 ANNEXES TO AYYLLCI\TTON (A)
whicli tlic Govcriitrictit sliail tiot rctliiire for purposcs of public
utility, shall bc liaiidcd ovcr gratuitously to the Company.
'1-hr: maiiner of acqiiiriiig such Iaiidï ï11;ilI hr tlir following:
w?ierir,vcr any land heccrmes riecessary to tlic Ciirriliniiy, it is liiiuntl
to send to the Ministry of Finance a rnap or maps on which thc
land >>-hichthe Company needs shall be shown in colour. The Govern-
ment undertakes, if it has no objection to make, to give its approval
rvithin a period of three months after receipt of the Company's
request. '
B. Lands beloiiging to the Government, of which use is being
mad'e, and which the Company shall need, shall be requested of
the Government in the manner prescribed in the precediiig para-
graph. and the Government, in case it should not itself need these
lands and should have no objection to make, shall give, within a
penod of thrce months, its approval to the sale asked for by the
Company.
The pnce of these lands shall be paid by the Company / such
pnce must be reasonable and riot exceed the current pricc of lands
of the same kind and utilized in the same manner in the district.
C. In the absence of a reply from the Government to requests
under paragraphs A and B above, after the expiry of two months
from the date of receipt o f the said requests, a reminder shall bc
sent by the Company to the Government ; should the Government
fail to reply to such reminder within a period of one month, its
silence shaU be regarded as approval.
D. Lariils wliiçh d u not belong to the Giivrrnment. and wtiich
are iicccssary to tlic Cirrn1);uiy shall hi: ac(liiiri:il I>y tlic Coiriliatiy,
by agrcenieiit witli tlic l>artii:s irii.i:rest.ed, aiiil tliroiigli tlic iiicdiilili
of thi: Govcriiiuciit.
III case ;igrarment. should not lie rcaçhed ;rs to the prict!~,thri
Govcmnicrit sIia11 riot ;ill(iw the vwners of sudi l:~riils Lii ilcirin~id
a price higlicr tliaii Llic priccs cornrnorily currciit for iici,qlil>ouring
lnrids of the saiiic iiaturc. Iii valiiitig siicli laiids, iio rciard sliall
hc: piid to the use to vrhich tlic Coiii1)any inay wish to put theni.

E. HoIy places and histoncal monuments, as well as al1 placcs

and sitcs of histoncal interest, are excluded from thc foregoing
proi,isions, as well as their immediate surroundings for a distance
of a t least two hundred metres.
F. The Company has the non-cxclusive right to take withiii
the territory of the Concession, but not elsewhere, on any unutilizcd
land belonging to the State, and to utilize gratuitously for al1 the
operations of the Company, any kinds of soil, sand, lime, gypsum,
stone and other building materials. I t is understood that if thc
utilization of the said materials were prejudicial to any rights
23 ANNEXES TO APPT.IC~\TIOS (A)

ivhatcvcr of third parties, tlic Coiiipaiiy sliould iiideninify those

whoec rights wcrc iiifringed.

Article 5
The operations of the Company in Persia shall be restricted in
the foilou,ing manner :
(1) The construction of any new railway line and of any
new port shall be subject to a previous agreement between
the Government and the Company.
(21 If the Company wishes to increase its existing service of
telephones, telegraphs, wireless and aviation in Persia, it shall
only be able so to do with the previous consent of the Govem-
ment.
If the Government requires to ntilize the meaus of transport and
communication of the Company for national defence or in other
critical circumstances, it undertakes to impede as little as possible
the operations of the Company, and to pay it fair compensation
for aii damages caused by the utilization above mentioned.

Article 6
A. The Company is authorized to effect, without special license.
.:dl imports iicccssary for tlic cxclilsive necds of its cniployccs nn
pqmeiit of the Custoiii duties and otlicr dutics and taxes iii forcc
nt the time of importatioii.
The Coiiipaiiy shall take the iiecessary iiieaslires to prevciit the
sale or the: hcinding over of products iinportrd to persons not
i!mplriycd by tlie Com~i;my.
o. The Company shall have the right to import, without special
licrnse, the erliiipment. mcitrricil, mediceil and surgiceil instruments
ancl ~~lurrnaccutical ~>ro(liicts,
ricccssary for its (lisl~cnsaricsand
hospitals iii l'ersia, and shall be exempt iii respect thereof from
any Ciistom duties and othrr diities and taxes in force a t the time
of importation, or payments of any nature whatever to the Persian
State or to local authorities.
C. The Company shall have the right to import, without any
license and exempt from any Custom dutics and from aiiy taxes
or payments of any nature whatever to the Persian State or t o
local authorities, anything necessary exclusively for the operations
of the Company in Persia.
D. The exports of petroleum shall enjoy Customs immunity
and shall be exempt from any taxes or payments of any nature
whatever to the Persian State or to local authorities.
25 A N N E X E S TO AYPLICATION (A)

Articlc 7
A. The Coiiipany aiid its rmployecs di;dl crijoy tlic legal protec-
tion of the Governinent.
B. The Government shall give, within the limits of the laws and
regulations of the country, al1 possible facilities for the operations
of the Company in Persia.
C . If the Government grants coiicessions to third parties for
the purpose of exploiting other mines within the territory of the
Concession, it must cause the necessary precantions to be taken
in order that these exploitations do not cause any damage to the
installations and works of the Company.
D. The Company shail be responsible for the determination of
dangerous zones for the construction of habitations, shops and
other buildings, in order that the Government may prevent the
inhabitants from settling there.

Article 8
The Company shall not be bound to convert into Persian currency
any part whatsoever of its funds, in particular any proceeds of the
sale of its exports from Persia.

Article g
Thc Coriipaiiy shall imniediately m;lkt! ils arratigeriictits to
procced ivitli its operations in the provinçc of Kcrrriaiisliah t h r o u ~ h
a subsidiary conipany witli a vicw 10 produciiig and rehning
petroleiim thcrc.

A T ~ ; c ~ IO
B

1. 'The siiriis to Iic liÿid L o Llic (;ovcrtimciit by the Comp;iny in

;iccortlaricc witli this Ajirecmeiit (besides those provi<lcd iri otlicr
articles) arc Iixcd as follo\vs :
(a) Ali annual royalty, hcgirining on January rst, r g j j , of
four shillings per ton of petroleum sold for consumption in
Persia or exported from Persia ;
f i j Payment of a sum equal to twenty per cent (zo %) of
the distribution to the ordinary stockholders of the A n g b
Persian Oil Company, Limited, in excess of the sum of six
hundred and seventy-one thousand two hundred and fifty
pounds sterling (L 671,zjo). whether that distribution be
made as dividends for any one year or whether it relates t o
the reserves of that Company, exceeding the reserves \\.hich,
according to its books, existed on December 31st, 1932 ;
zj ANNEXES 1.0 AYPLICATION ( A )
(c) Tlic total ;imolint to be paid by the Cotripariy for cach
calciirinr (Chrisliari) yc:u undrr siib-clauses (a) aiid (b) shnll
ne\-er bc lcss tliari scven Iiundr~dand fifty thousand pouiirls
sterliiig (f;75o,ooo).

II. Payments by the Company under this Article shall be made

as follo\vs :
(a) On March 31st. June 30th. September 30th and Decem-
ber 31st of each year, on each occasion onehundred and eighty-
seven thousand five hundred pounds sterling (il187,500) (the
payment relating to hlarch 31st, 1933. shall be made imme-
diately after the ratification of the present Agreement) ;
(b) On February &th, 1934, and thereafter on the same
date in each year, the amount of the tonnage royalty for the
previous year provided for in sub-clause 1 (a) less the sum
of seven hundred and fifty thousand pounds sterling (£75o,wo),
already paid under sub-clause II (a) ;
(cj Any sums due to the Government under sub-clause 1
(b) of this article shall be paid simultaneously with any distri-
butions to the ordinary stockholders.

III. On the expiration of this Concession, as weU as in the case

of surrender by the Company under Article 25, the Company shaii
paq' to the Government a sum equal to twenty per cent (20 O/,) of :
(a) Tlic çiirl)liis difierence hetween the ainoutit of thc rcscrvcs
(Gencral Rcscrvc) i:)Ithe Ang-Io-Persian Oil Company, Liinited,
a t thc date of tlic cxliirntiun of the Concession or of itssurrcntlcr.
and the atiioutit of tlic same resrrvrs nt December y s t , 1932 :

(6) The surplus difference b~tween the balance carried

tonvard by the Aiiglo-Pcrsiaii Oil Girnp;iny, T,irnited, a t the
date tif the expiratioii of tlic Coticcssioti or of its c;iirrentler and
the balaiicc carricd forwtird hy that Company a t Dccciii-
ber p s t , 1932. Aiiy payrnerit (liie to the Government under
this cl;i.iise shall be inadc witliiii a ~icriodof orle rnorilli frum
the date of the general meeting of the Company follouring
the expiration or the surrender of the Concession.

Il7. The Government shall have the right to check the rcturns
relating to sub-clause 1 (a) which shaU be made to it a t latest on
February 28th for the preceding year.

T:. To secure the Government against any loss which migbt result
£rom fluctuations in the value of English currency, the parties
have agreed as follows :
26 ANNEXES TO AE'k'LICA.I'ION (A)
(fi) If, a t atiy tirrie. the prict: of gold in Londoii exceeds sis
pounds stcrliiig licr ottiicc (oiirir:e tnby), the payments to be
madc by thc Cotoiiipaiiy iii oi:çonl:~riiic:with the present Agee-
ment (with the csccptiori of siirris iliic t o tlieGnvernment under
sub-clause 1 (b) and clause III (a) and (b) of this article and
sub-clause 1 (a) of Article 23) shall be increased by one
thousand four hundred and fortieth part ( i )
for each
144O
penny of increase of the price of gold above six pounds sterling
(26) pcr ounce (ounce troy) on the due date of the payments ;
(b) If, a t any tirne, the Government considers that gold has
ceased to be the general basis of values and that the payments
ahove mentioned no longer give it the security which is intended
by the parties, the parties shall come to an agreement as to
a modification of the nature of the security above mentioned
or, in default of such an arrangement, shall submit the question
to the Arbitration.Court (Article 22) which shall decide whether
the security provided in sub-clause (a) above ought to be
altered and if so, shall settle the provisions to be substituted
therefor and shall fix the period to which such provisions SM
apply.
VI. I n case of a delay, beyond the dates fixed in the present
Agreement, which might be made by the Company in the payment
of surns due by it to the Govcrnment, interest a t five pcr cent
(5 y")per annum shall be paid for the period of delay.
Article I r
1. The Curnpaiiy shaU ùc cotni~lcLclycxcinpt. for i t s operations
in Pcrsio, for the first thirty ycars, froiii aiiy taxatiijri ires se rit or
fiitiirc of Lhe Statr and of local authorities ; iii coiisidcratioii tlicre-
for the frillowitig l>ayrncrit$sh;ill he made to thc Govcriiiiicnt :

(u) 1:)uriiig the first fiftccii ycars of tliis Coricrssioii. on

Fcbruary 28th of each ycar and, for the first tiiiic, on Ecliriiury
zlith, 1934. iiitic pcriçe for rnch of the fir!t. six million (b,ovo,ooo)
tons of petrolcuin, oii wliiçli Llic roy:~lty prvvided for in
Article IO, 1 (a), is payable for the preceding calendar (Chris-
tian) year, and six pence for each ton in excess of the figure
of six miilion (6,000,ooo) tons above defined ;

(b) The Company guarantees that the amount paid under

the preceding siib-clause shall ncver be lcss than two hundred
and tiventy-five thousand pounds sterling ( ~ ~ ~ 5 , 0;0 0 )
(c) During the fiftcen years following, one shilling for each
of the first six million (6,000,ooo) tons of petroleum, 011 which
*7 ANNEXES TO APP1,ICATTON (A)
the royalty providcd for in Article IO, 1 (IL). is p;ryahle for the
1>~r"'dirigci~lendaryeai-, and niiie pciicc for cach ton in cxcess
uf ilie figure of 6,ooo,croo tons above dehiicd.

(d) The Company guarantees that the amount paid under

the preceding sub-clause (c) shall never be less than three
hundred thousand pounds sterling (~300,ooo):
II. Before the year 1963, the parties shall come t o an agreement
as to the amounts of the annual paymcnts to be made, in considera-
tion of the complete exemption of the Company for its operations
in Persia from any taxation of the State and of local authorities,
during the second period of thirty years extending until Decem-
ber p s t , 1993.
Article 12
4. The Company, for its operations in Persia in accordance
with the present Agreement, shall employ ail means customary
and proper t o ensure economy in and good returns from its opera-
tions, to preserve the deposits of petroleum and t o exploit its
Concession by methods in accordance with the latest scientific
progress.
B. If, ivithin the territory of the Concession, there exist other
mineral substances than petroleum or woods and forests belonging
to the Government, the Company may not exploit them in accord-
ance with the present Concession. nor object t o their exploitation
hy other pcrsoiis (siihject to the due conipliance with the termsuf
clause C of Article 7) : 1)ilt the Crrrnp;lny sh;~ll1i;ive tlic riglit tu
utilizr. tlit?s;~idsuhstaiiccs or tlic woods and forcsts aliiovc inciitioncd
if they arc iiccess;iry for the exploratioii or the extraction of
pet roleuiii.
C . Al1 boreholcs wliiçti, not having resultrd in the rliscovery of
clruleum, producc watcr or Iirecioiis siibst;~riccs,sliall bc rcscrvorl
o r the Governnieiit wliicli sliall iirinicdiatcly bc infornicd of
these di~~ilveries by the Conipanp, aiid the Goveriimeiit shall
inforni thc Coinpariy as soon as possible if it wishes t o trike p o s ~ s -
siun of thein. If it wishes tu take possession, it sliall watcli that
the operations of the Company be not impeded.

Article 13
The Company undertakes t o send, a t its own expense and within
a reasonable time, to the Ministry of Finance, whenever the repre-
sentative of the Government shall request it, accurate copies of
a l plans, maps, sections and any other data whether topographical,
geological or of drilling relating ta the territory of the Concession,
which are in its possession.
28 A S S E X E S -1'0 APPLICATION (A)

Fiirtherinore, the Company sliall coiiiiiiiinicate to the Govern-

ment throughoiit the rluratioti of the Coticessioii al1 iniportant
scientifir: ;ind tec1inic;il (1;it;~rcsultiiig from its work in l'rrsi;~.
Al1 Ilicrïc diiciirricnls shall be considerad by tlio C.ovc:riirnerit ;L<
confidential.
Article 14
A. The Govemment shall have the right to cause to be inspected
at its wish, a t any reasonable time, the technical activity of the
Company in Persia, and to nominate for this purpose technical
specialist experts.
B. The Company shall place at the disposa1 of the specialist
experts nominated ta this end by the Government, the whole of
its records relative to scientific and technical data, as well as al1
measuring apparatus and means of measurcment, and these
specialist experts shall, further, have the right to ask for any
information in al1 the offices of the Company and on al1 the
temtories in Persia.
Article Ij
TIic G<>verriiiieiitslinll have thc righr to apl>uint:i rel)rcsent;irive
\\ho shall lie dcsimnted '1)elccatc of thi: 1miicri;il Go\~criiriierit".
This representati;e shall haveuthe right :
(11 To obtain from the Company al1 the information to uzhich
the stockholders of the Company are entitled ;
(2)To be pi-eseiit a t al1 tlic riicctiiigs of the Board of L ) i r ~ -
tors, of its corninittees and nt al1 the iiieetings of stockholders,
\i.liich have brrn cunvened to coiisider aiiy questioii arising
out (ilthe rel;ltioris Iictwceii the Govrrnment ;mil tlic Corriliariy ;
(3) To prcsidc L X oficiu, witli ;L ciistirig vote, ovcr thc Com-
mittec to be set up by Llic Cornpariy for the purpox of
distribiitiiig the grant for nrid supcrvisitig the professioirai
ediic;it.ion in Grr;it Britaiii of l'ersiaii iiationals refemd to
in hrticlc IG :
(4)To 1-eqiiest that specinl rncctitigs of the Board of Uirec-
tors br conveiied r i t any titnc, to co~isidrrany proposal th;it.
the Government shall submit to it. These meetings shall be
coni-ened within fifteen days from the date of the receipt by
the Secretary of the Company of a request in writing to that
end.
The Company shall pay to the Govemment to cover the expenses
to be borne by it in respect of the salary and expenses of the above-
mentioned delegate a yearly sum of two thousand pounds sterling
&2,oooj. The Government shall notify the Company in writing of
the appointment of this delegate and of any changes in such
appointment.
29 ANNEXES TO APPLICATION (A)

Article ru
1. 110th pirlics recogiiize and Ficcept as the principle goveming
the perforrnaricc of this Agreement tlic supremc tiecessity, in their
mutual interest, of maintaining the highest degree of efficiency and
of economy in the administration and the operations of the Company
in Persia.
II. It is, however, understood that the Company shall recmit
its artisans as well as its technical and commercial staff from among
Persian nationals to the extent that it s h d find in Persia persons
who possess the requisite competence and experience. I t is likewise
understood that the unskilled staff shall be composed exclusively
of Persian nationals.
III. The parties declare themselves in agreement to study and
preparc a general plan of yearly and progressive reduction of the
non-Persian employees with a view to replacing them in the shortest
possible time and progressively by Persian nationals.
IV. The Company shall make a yearly grant of ten thousand
pounds sterling in order to give in Great Britain to Persian nationals
the professional education necessary for the oil industry.
The said g a n t shall be expended by a Committee which shall
be consiituted as provided in Article 15.

The Cunipatiy shdl I>e i~cspotisiblrfor orgünizing :lnd shall pay

the cris1 of 'the provision, coiitrol rinrl iipkccp of sariitary siid public
health services, accordiiig to thc rcquirciiieiits of the iiiost modem
hS.giciie pr;ii:tiscd iii Persi;~,oii al1 the lands of the Cornl~anyand
in al1 hilil(lings, and dwcllirigs, destiiird t>y the Company for ihc
use r i i itç employecs, iiicluding the worktiicii eriildoycd ivithiii the
tcrritory of tlic Coiicession.
Article JX
Whericvcr the Corrij)atiy shall ni;bke issilcs of sliarcs to the public,
tfic iubscriptiun lists shall be upcricd a t Teherati a t the same time
as elsewhere.
Article 19
The Company shall seIl for internai consumption in Persia.
including the needs of the Government, motor spirit, kerosene and
fuel oil, produced from Persian petroleum, on the following hasis :

(a) On the first of Julie iii each year, the Company shall
ascertain the average Roumanian f.0.b. prices for motor spirit,
30 ANNEXES TO APPLICATION (A)
kerosene and fuel oil and the average Gulf of Mexico f.0.b.
prices for each of these products during the preceding period
of twelve months ending on April 30th. The lowest of these
average prices shall be selected. Such prices shall be the "basic
prices" for a period of one year, beginning on June 1st. The
"basic pnces" shall be regarded as being the prices a t the
refinery.
(b) The Company shall sel1 (1) to the Government for its
own needs, and not for resale, motor spirit, kerosene and fuel
ail a t the basic prices, provided in siib-clause (a) above, with
a deduction of twenty-five per cent (25 %) ; (2) to other
consumers a t the basic prices with a deduction of ten per cent
(10 %).
(G) The Company shall be entitled to add to the basic prices
mentioned in suh-clause ( a ) , al1 actual costs of transport and
of distribution and of sale, as well as any imposts and taxes
on the said products.
(d) TheGovernment shall forbid the export of the petroleum
products sold by the Company under the provisions of this
article.
Article 20
1. ( a ) During the last ten years of the Concession, or during the
two years from the notice preceding the surrender of the Concession
provided in Article 25, the Company shall not sel1 or otherwise
alienate, except to subordinate companies, any of its immovable
properties in Persia. During the same period, the Compaiiy shall
not alienate or export any of its movable property whatever except
such as has become unutilizable.

(b) During the whole of the period preceding the last ten years
of the Concession, the Company shall not alienate aiiy land
obtained by it gratuitously from the Government ; it sliall not
export from Persia any movable property, except in the case when
such property shall have become unutilizable or shall he no longer
necessary for the operations of the Company in Persia.
II. At the end of the Concession, whether by expiration of time
or otherwise, al1 the property of the Company in Persia shall become
the property of the Government in proper working order and free
of any expenses and of any encumbrances.
III. The expression "al1 the property" comprises ail the lands,
buildings and workshops, constructions, wells, jetties, roads, pipe-
lines, bridges, drainage and water-supply systems, engines, installa-
tions and equipments (including tools) of any sort, al1 means of
transport and communication in Persia (including, for example,
automobiles, carriages, aeroplanes), any stocks and any other
3I ANNEXES TO APPLICATION (A)
objects in Persia which the Company is utilizing in any manner
whatsoever for the objects of the Concession.

Article 21

The contracting parties declare that they base the performance

of the present Agreement on principles of mntual goodwill and
good faith as well as on a reasonable interpretation of this Agree-
ment.
The Company formally undertakes to have regard at al1 times
and in al1 places to the rights, privileges and interests of the Govern-
ment and shall abstain from any action or omission which might
be prejudicial to them.
This Concession shall not be annulled by the Government and
the terms therein contained shall not be altered either by general
or special legislation in the future, or by administrative measures
or any other acts whatever of the executive authorities.

Article 22
A. Any differences between the parties of any nature whatever
and in particular any differences arising out of the interpretation
of this Agreement and of the rights and obligations therein contained
as well as any differences of opinion which may arise relative to
questions for the settlement of which, by the terms of this Agree-
ment. the agreement of both parties is necessary, shall be settled
by arbitration.
B. The party which requests arbitration shall so notify the other
party in writing. Each of the parties shall appoint an arbitrator,
and the two arbitrators, before proceeding to arbitration, shall
appoint an umpire. If the two arbitrators cannot, within two
months. agree on the person of the umpire, the latter shall be
nominated, at the request of either of the parties, by the President
of the Permanent Court of International Justice. If the President
of the Permanent Court of International Justice belongs to a nation-
ality or a country which, in accordance with clause C, is not
qualified to furnish the umpire, the nomination shall be made by
the Vice-President of the said Court.
C. The umpire shall be of a nationality other than Persian or
British ; furthermore, he shall not be closely connected with Persia
or with Great Britain as belonging to a dominion, a protectorate,
a colony, a mandated country or other country administered or
occupied by one of the two countries above mentioned or as being
or having been in the service of one of these countries.
D. If one of the parties does not appoint its arbitrator or does
not advise the other party of its appointment, within sixty days
of having received notification of the request for arbitration, the
32 ANNEXES TO APPLICATION (A)
other party shall have the right to request the President of the
Permanent Court of International Justice (or the Vice-President
in the case provided a t the end of clause B) to nominate a sole
arbitrator, to be chosen from among persons qualified as above
mentioned, and, in this case, the difference shall be settled by this
sole arbitrator.
E. The procedure of arbitration shall be that followed, a t the
time of arbitration, by the Permanent Court of International
Justice. The place and time of arbitration shall be fixed by the
umpire or by the sole arbitrator provided for in clause D, as the
case may be.
F. The award shall be hased on the juridical principles contained
in Article 38 of the Statutes of the Permanent Court of International
Justice. There shall be no appeal against the award.
G. The expenses of arbitration shaü be borne in the manner
determined by the award.

Article 23
1. In full settlement of al1 the claims of the Government of any
nature in respect of the past until the date of coming into force
of this Agreement (except in regard to Persian taxation), the
Company: (a) shall pay within a period of thirty days from the
said date the sum of one million pounds sterling K~,ooo,ooo)and,
besides, ( b ) shall settle the payments due to the Government for
the financial years 1931 and 1932 on the basis of Article IO of this
Agreement and not on that of the former D'Arcy Concession, after
deduction of two hundred thousand pounds sterling (~zoo,ooo)
paid in 1932 to the Government as an advance against the royalties
and f;113,403 3s. 1od. placed on deposit a t the disposa1 of the
Government.
II. Within the same period, the Company shali pay to the Gov-
ernment in full settlement of al1 its claims in respect of taxation for
the period from March zxst, 1930, to December y s t , 1932, a sum
calculated on the basis of sub-clause (a) of clause I of Article II,
but without the guarantee provided in sub-clause (6) of the same
clause.

Articb 24
If, by reasoii of the anriulment of the D'Arcy Concession, litiga-
tion should arise betweeii the Company and private persons on
the subject of the duration of leases made in Persia before Ilecem-
ber 1st. 1932, within the limits allowed by the D'Arcy Concession,
the litigation shali be decided according to the rules of interpretation
following :
33 ANNEXES TO APPLICATION (A)
( a ) If the lease is to terminate, according to its terms, at
the end of the D'Arcy Concession, it shall retain its validity
untii May 28th. 1961, notwithstanding the annulment of the
said Concession ;
( b ) If it has been provided in the lease that it shall be valid
for the duration of the D'Arcy Concession and, in the event
of its renewal, for the duration of the renewed Concession,
the lease shall retain its validity until December 31st, 1993.

Article 25
The Company shall have the right to surrender this Concession
a t the end of any Christian calendar year, on giving to the Govern-
ment notice in writing two years previously.
On the expiry of the period above provided, the whole of the
property of the Company in Persia (defined in Article 20, III) s h d
become free of cost and withont encumbrances the property of
the Government in proper working order and the Company shall
be released from ariy engagement for the future. In case there
should be disputes between the parties concerning their engage-
ments before the expiry of the period above provided, the differences
shall be settled by arbitration as provided in Article 22.

Article 26
This Concession is granted to the Company for the period begin-
ning on the date of its coming- into force and ending. on Decem-
ber-31st, 1993.
Before the date of December ? ~ s.tIOOZ.
.,,-,this Concession can onlv
corne to an end in the case that-the Company should surrender thé
Concession (Article 25) or in the case that the Arbitration Court
should declare the Concession annulled as a consequence of default
of the Company in the performance of the present Agreement.
The following cases only shall be regarded as default in that
sense :
( a ) If any sum awarded to Persia by the Arbitration Court
has not been paid within one month of the date of the award ;

(6) If the volnntary or compulsory liquidation of the Com-

pany be decided upon.
In any other cases of breach of the present Agreement by one
party or the other, the Arbitration Court shall establish the respons-
ibilities and determine their consequences.
Any transfer of the Concession shall be subject to confirmation
by the Government.
34 ANNEXES TO APPLICATION (A)

This Agreement shall come into force after ratification by thc

hlajlis and promulgation by Decree of His Imperial lfajesty the
Shah. The Govemment undertakes to submit this Agreement, a s
soon as possible, for ratification by the lfajlis.
XADB a t Teheran the twenty-ninth April one thousand nine
hundred and thirty-three.

For the Imperial Govcrnment of l'crsia,

(Signed) S. H. TAQIZADEH.
For and on behalf of the Anglo-Persiaii Oil Company, Limited,
(Signed) John C A D ~ I AChairnzar~;
~;,
1%':FRASER, Defiuty Chairnza?~.

(This Agreement came into force on May 29th. 1933, followiiig

its ratification by the hlajlis on May &th, 1933, and the Royal
Assent, given on hlay 29th. 1933.)
35 ANNEXES TO APPLICATION (B)

ANNEX B
LETTER FROM T H E CHIEF REPRESENTATIVE OF T H E
ANGLO-IRiûUIAN OIL COMPANY, LIMITED, IN TEHRAN,
TO T H E PRINE MINISTER OF IRAN,
PllOTESTING AGAINST THE RESOI.UTION OF T H E IIAJLIS OIL COJIAIITTEE
I N FATOUI< OF NATIONALIZING T H E OIL INDUSTRY

Tehran, 28th April, 1951.

[The text of the letter given here is the text which the Chief
Representative of the Anglo-Iranian Oil Company, Liniited, in
Tehran, was instructed to send. A copy of the letter as sent by
him has not yet been received in London.]
Yonr Excellency,
The press of to-day contains a statement that the Oil Committee
has passed a resolution for subinission to the Majlis proposing to
take over immediately al1 the activities in Persia of the Anglo-
Iranian Oil Company.
If that information is correct we beg to ask you to convey to
the Cabinet and to the Majlis that this Company formally protests
against the possihility of such a breach of the Agreement between
the Imperial Government and the Company.
The Agreement as you weil know provides in its Article 21 that
its performance should be based on principles of mutnal good ~vili
and good faith and that it should not be annulled and that the
terms of it should not be altered by any legislative, administrative
or esccutive acts.
Iielying on that solemn promisc which was approved by the
hlajlis and which hecame ;i part of the law of Iran, this Company
has worked for eighteen years to develop the oil indnstry in Iran
and has assisted the people of Iran in their economic progress.
\Ve cannot helieve that that solemn promise can be disregarded.
\Vhilc f<,rriially ~,rutejring;~::iinst arteriil)ts 111111:~tcr:illy
tu alter
tlie conditions of its oi>er:itionsin 1r:iii. thc (:onii>aii\.hc<s to rvniincl
Your Excellency that a t no time has the Company Fcfused, nor
do they refuse now, to consider alteration of those conditions by
agreement to be negotiated, concluded and performed on the
principles of mutual good \vil1 and good faith, which principles the
Imperial Government and the Company made the basis of their
CO-operation.
 ANNEXES I O APPLICATION (c)

ANNEX C
TEXT OF T H E IRANIAN OIL NATIONALIZATION ACT
OF T H E 1st MAY, 1951
[Translation]
By the grace of Almighty God,
We,
Pahlavi Shahinshah of Persia,
hereby command, by virtue of Article 27 of the
Supplementary Constitutional Law, that :
Art. I. The Bill conceming the procedure for enforcement of
the Law conceming the nationalization of the oil industry through-
out the country which was approved by the Senate and the Majlis
on 9th Urdibihisht (30th April) and is hereto attached may be
enforced.
Art. z . The Council of Ministers are charged with the enforce-
ment of this Law.
The text of the Bill conceming procedure for enforcement of
the Law relating to the nationalization of oil, as approved by the
two Houses of Parliament after amendments by the Majlis.
Art. 1. With a view to arranging the enforcement of the Law of
24 and 29 Isfand 1329 (15th and 20th Rlarch, 1951) conceming the
nationalization of the oil industry throughout Persia, a mixed
Board composed of 5 Senators and 5 Deputies elected by each
of the two Houses and of the Minister of Finance or his deputy
shall be formed.
Art. z . The Govemment is bound to dispossess at once the
former Anglo-Iranian Oil Company under the supervision of the
mixed Board. If the Company refused to hand over a t once on the
grounds of existing claims on the Government, the Government can,
by mutual agreement, deposit in the bank Milli Iran or in any
other bank up to 25 %of current revenue from the oil after deduc-
tion of exploitation expenses in order to meet the probable claims
of the Company.

Art. 3. The Govemment is bound to examine the rightful

claims of the Government as well as the nghtful claims of the Com-
pany under the supervision of the mixed Board and to submit its
suggestions to the two Houses of Parliament in order that the
same may be implemented after approval by the two Houses.
37 ANNEXES TO APPLICATION (c)
Art. 4. Whereas, with effect from 29th Isfand 1329 (20th March,
1951). when nationalization of the oil industry was sanctioned
also hy the Senate, the entire revenue derived from oil and its
products is indisputably due to the Persian nation, the Government
is bound to audit the Company's accounts under the supervision
of the mixed Board which must also closely supervise exploitation
as from the date of the implementation of this lalv until the appoint-
ment of an executive body.

Art. 5 . The mixed Board must draw up, as soon as possible,

the statute of the National Oil Company in which provision is to
be made for the setting up of an executive body and a supervisory
body of experts, and must submit the same to the two Houses for
approval.
Art. 6 . For the gradua1 replacement of foreign experts by
Persian experts the mixed Board is bound to draw up regulations
for sending, after competitive exarninations, a number of students
each year to foreign countries to undertake study in the various
branches of required knowledge and gain experience in oil industries,
the said regulations to be camed out by the Ministry of Education,
after the approval of the Council of Ministers. The expenses
connected with the study of such students shall be met out of oil
revenues.
Art. 7 . Al1 purchasers'of products derived from the wells taken
back from the former Anglo-Iranian Oil Company can, in future,
buy annually the same quantity of oil they used to buy annually
from the Company from the heginning of the Christian year 1948
up to 29th Isfand 1329 (20th March, 1951) a t a reasonable inter-
national price. For any surplus quantity they shall have prionty
in the event of equal terms of purchase being offered.
Art. 8. Al1 proposals formulated by the mixed Board for the
approval of the Majlis and submission to the Majlis must be sent
to the Oil Committee.
Art. 9 . The mixed Board must finish its work within three
months as from the date of approval of this law and must submit
the report of its activities to the Majlis in accordance with Article 8.
In the event of requiring an extension it must apply giving valid
reasons for such extension. Whilst, however, the extension is hefore
the two Houses for approval the mixed Board can continue its
functions.
3S ANNEXES TO APPLICATION (D)

ANNEX D

LETTER FROM T H E CHlEF REPRESENTATIVE

O F T H E ANGLO-IRANIAN OIL CORIPANY, LIMITED,
TO T H E PRIXE RIINISTER O F IRAN,
REQUESTINC TEIAT ITS DIFFEKENCE WITH THE IJLPEIllAL GOVERN-
MENT OF IRAN BE SORMITTED TO ARIIITRATION, IIi ACCORDANCE
WITH THE TERXS OF AKTICLE 22 OF THE CONVENTION

Tehran, 8th RIay, IgjI.

l'our Excellency,
1 am instructed by Sir William Fraser, Chairman of the Anglo-
Iranian Oil Company, Limited, to submit to you the following
notification on his behalf :
"Your Excellency,
The measures recently introduced in respect of the Oil
Industry in Iran clearly have the object of either bnnging the
Concession held by the Anglo-Iranian Oil Company, Limited,
t o an end, or annulling it before the date provided therein
for its termination, by a unilateral act of the Imperia1 Iranian
Government in breach of Articles 26 and 21 of the Concession
Agreement or unilaterally altering the terms therein contained
in hreach of Articles 21 and I of that Agreement.
Therefore 1, on bebalf of the Company and in accordance
with the rights reserved t o it by Articles zz and 26 of the
Concession Agreement, beg to notify the Government that the
Company requests arbitration for the purpose of determining
whether in so attempting to annul, or terminate the Concession
or t o alter the Concession Agreement, the Government has
acted in accordance with the terms of the Concession Agree-
ment and for the purpose of establishing the responsihility
for determining the consequences of the breach above re-
ferred to.
1 further beg t o state that the Company has appointed the
Right Honourable Lord Radcliffe, G.B.E., as its arbitrator
and that he has given his consent to act.
FinaUy, the Company, in view of the gravity of the situation
brought about by the measures above referred to, expresses
the hope that the Government will appoint its arbitrator a t
t h e Government's earliest convenience."
39 ANNEXES TO APPLICATION (D)
1 shall be glad if Your Excellency will kindly acknowledge receipt
of the above notification from Sir William Fraser.
With the assurance, etc.
For ANGLO-IRANIAN OIL CO., LTD.,
(Signed) N. R. SEDDON.

Copy to H.E. the Minister of Finance,

4O ANNEXES TO APPLICATION (E)
ANNEX E
LETTER FROM T H E IRANIAN MINISTER OF FINANCE
TO M R , SEDDON, REPRESENTATIVE OF T H E FORMER
ANGLO-IRANIAN OIL CORIPANY, DATED 20th MAY, 1951 '
[Translation]
Mr. Representative of the former Anglo-Iranian Oil Com-
pany :
His Excellency the Prime Minister has instructed me to convey
the following reply to your letter No. 22/29619 dated 8th hlay.
1951, addressed to him :
In accordance with the Acts of 15th and 20th March, 19j1, and
30th April, 1951, copies of which are enclosed herewith, the petro-
leum industry throughout Iran has been nationalized, and the
Imperia1 Government is required to undertake itself the explora-
tion for and production, refining and exploitation of petroleum
resources.
I t perhaps needs no explanation that :
FIRSTLY : the nationalization of industries derives from the right
of sovereignty of nations, and other governments, among them
the British Government and the Mexican Government, have in
various instances avaiied themselves of this same right.
SECONDLY private agreements, even supposing their validity is
established, cannot hinder the exercise of this right which is
founded on the indisputable principles of international law :
THIRDLYthe fact of nationalization of the petroleum industry,
which derives from the exercise of the right of sovereignty of the
Iranian nation, is not referable to arbitration, and no international
authority has the competence to deal with this matter.
In view of these premises the Iranian Government has no dnty
in the existing circumstances other than implementing the articles
of the above-mentioned Acts and does not agree in any way with
the contents of the letter of the former Oil Company on the subject
of reference of the matter to arbitration.
You are meanwhiie notified that, in accordance with Articles 2
and 3 of the Act of April1951, the Iranian Govemment is prepared
to examine the just claims of the formcr Oil Company.
In conclusion. the former Oil Company is hereby invited t o
nominate immediately its representatives with a view to making
arrangements concerning the matter and carrying out the above-
mentioned law, so that the dav, hour and place of their attendance
should be notified.
(Signed) MOHAMMED ALI VARASTEH,
Minister of Finance.
--
' The annex printed here represents the text as amended by the United Kingdom
Gorernrnent following an exchange of letters between the Parties. (See Part IV.)
4I ANPiEXES TO APPLICATION (F)

ANNEX F

NOTE DELIVERED BY HIS BRITANNIC MAJESTY'S

AMBASSADOR IN TEHRAN TO THE PRIME MINISTER
OF IRAN ON THE 19th MAY, 1951

[The text given here is the instruction sent by the Secretary

of Çtate for Foreign Affairs to Sir Francis Shepherd, British Ambas-
sador in Tehran, on the basis of whicb the note actualiy delivered
by the Ambassador would be drafted. A copy of the note as delivered
by him has not yet been received in London but is unlikely t o
differ in any point of substance from the instruction.]

1 have received through His Imperial Majesty's Ambassador in

London your reply to the message which 1 sent to you through him
on May 2nd. 1 regret to find that it contains no response to the sug-
gestion which 1 made, and whicb 1 have since reaffirmed pnblicly,
that His hlajesty's Government in the United Kingdom wish to
see the question of the future operations of the Anglo-Iranian
Oil Company in Iran settled by negotiation, but instead appears
to assert a right by the Imperial Government of Iran t o proceed
by unilateral action to dispossess the Anglo-Tranian Oil Company.

His Majesty's Government fully understand and sympathize with

the desire of the Iranian Government to strengthen the economic
structure of tbeir country and to provide for the general welfare
of its people. They themselves have constantly shown in practical
ways that these objects are of deep concern to them. They find
it diflïcult to believe, however, that the unilateral action which
the Iranian Government are proposing to take will contribute
towards their fulfilment.
His Majesty's Government, moreover, iieither desire nor intend
to question the exercise by Iran of any sovereign rights which she
may legitimately exercise. They maintain, however, that the action
now proposed against the Company is not a legitimate exercise
of those rights. The 1933 Agreement is a contract between the
Persian Government and a foreign Company concluded under the
auspices of the League of Nations after an attempt by the Iranian
Government to deprive the Company of these rights under its
previous Concession had been brought by His Majesty's Govern-
ment before the League of Nations. I t was, moreover, ratified
by the Majlis and became Persian law. Further, the Agreement
contains two very important provisions :
43 ANNEXES TO APPLICATION (F)
this opportunity to reaffirm that His Majesty's Governnient are
prepared to send a mission forthwith to Tehran to discuss the
terms of a new agreement. 1 earnestly trust that Your Excellency
will be prepared to agree to this procedure and to conduct nego-
tiations with a mission on a fair and equitable basis.
In conclusion, 1 note that Your Excellency has reciprocated the
desire which 1 have already expressed to you of maintaining good
relations and strengthening the foundation of friendship between
Iran and the United Kingdom. 1 should, however, be less than
frank if 1 did not Say that a refusa1 on the part of the Iranian
Government to negotiate, or any attempt on their part to proceed
by a unilateral action to the implementation of the recent legislation,
could not fail gravely to impair those friendly relations urhich we
both wish to exist and to have the most serious consequences.
 ANNEX G
LETTER FROM T H E IliANIAN MINISTER OF FINANCE TO
MR. SEDDON, REPRESENTATIVE OF T H E I~ORIIIER
ANGLO-IRANIAN OIL COMPANY, D.4TED 24th MAY, 1951
[Translation]

Mr. Representative of the former Anglo-Iranian Oil

Company,
With reference to my letter 9582 of the 20th May, since you
have not, so far, nominated your representatives for making arran-
gements to execute the laws for the nationalization of oil, 1 have
to state :
1 am waiting every day in the Finance Ministry for your repre-
sentatives.
Should you fail to nominate and send your representatives within
one week, that is before the close of the 30th May, which is a
Wednesday, theGovernment wiU haveno choice but to act according
to its legal duties as prescribed in the laws of the 15th Rlarch and
the 20th March and that of the 30th April, 1951.

(Signed) MOHARIR~ED AI.I VARASTEH,

Minister of Finance.