§ VISCOUNT TEMPLETOWN had given Notice that he would draw the attention of His Majesty's Government to the present position of the claim of the Basle Trading Company, Limited, to the restitution of their property situated in India confiscated by the Indian Government contrary to International Law and common justice six months after the Armistice; ask if His Majesty's Government will appoint two impartial persons to advise on the company's claim, and as to what should be done with a view to an equitable settlement of that claim being arrived at, as was done in the case of the company's similar claim with regard to their property on the Gold Coast which resulted in the restitution to them of that property; and move for Papers.
§ The noble Viscount said: My Lords, we criticise very freely the Governments 461 of other countries for seizing the properties of their citizens, but it were well to keep our eyes on the British Commonwealth of Nations, for I wish you particularly to note that the Government of India, six months after the Armistice, seized the property of friendly neutrals. I speak of the property of a Swiss company, the Basle Trading Company, which, seized in May, 1919, was transferred in 1920 to the Commonwealth Trust. I do not propose to weary the House with the whole history of this case, for I have given the full details here more than once. But I do earnestly wish the House to realise what a crying scandal this matter is. Secure in the justice of their claim, the Basle Trading Company have for years been pressing the India Office to have the case referred to the arbitration of impartial persons. This the India Office refuse to do. Why? May it not be that they fear the verdict of the arbitrators? And do they not thereby tacitly acknowledge their consciousness of the injustice from which the Basle Trading Company is suffering?
§ This Swiss company has, indeed, had much to endure at the hands of Britain. Other property of theirs, situated on the Gold Coast, was, in the madness of war time, also seized, and many weary years of negotiation passed before it was restored to them. But in the end His Majesty's Government was compelled, not only to restore the property, but to pay a considerable sum for compensation. There is even more reason for doing, in the case of India, what was done in the case of the Gold Coast, since the property in India was seized after the Armistice, when the world was supposed to be at peace. Do not imagine, however, that the Basic Trading Company is making any excessive or enormous demand. That is not the case. What they ask for is arbitration by impartial persons such as was provided in the case of the Gold Coast claim. There is one question which arises on the claim of the Basle Trading Company for the restitution of their property which I consider is extremely serious, and that is that there seems to be a flouting, nothing less, of Magna Carta. What does Magna Carta say? It says very distinctly, "To no one will we sell, to no one will we refuse justice or delay right or justice." Now justice delayed is justice denied. I have been at this ques- 462 tion for ten years and have only now succeeded in getting to the stage at which we have arrived. However, I hope that some day I shall see daylight.
§
The injustice complained of is the confiscation of the Basle Company's property contrary to the accepted doctrine, as stated in an opinion given by Sir John Simon, Mr. (now Mr. Justice) Maugham and Mr. F. T. Barrington Ward on May 21, 1919, that such confiscation
is incompatible with the accepted doctrine that property of neutral persons situate in a friendly country is immune from confiscation.
The justice of the claim was admitted by His Majesty's Government in 1928, when they returned to the Basle Company, in somewhat similar circumstances, that part of their property which was situated in the Gold Coast. The doctrine referred to, I am sure your Lordships will agree, applies in the case of the Basle Company's Indian property equally as it did in the case of the Gold Coast property. It was, indeed, confirmed in 1931 by Sir John Simon, K.C, and Mr. Gavin. Simonds, K.C, with specific reference to the confiscation of the Basle Company's Indian property as follows:
In our opinion the protest made to His Majesty's Government against the seizure and confiscation of this company's property on the Gold Coast may be made with the same reason and force against the seizure and confiscation of its property in India. It appears to us that the action taken by the Government in regard to the property of the company in India was contrary to the generally accepted principle of the law of nations that the property of neutral persons is immune from confiscation.
But this action is not in our opinion open to attack in any legal proceedings by petition of right or otherwise either in this country or in India. For, contrary though it might be to the canons of International Law, it was expressly validated by the Act No. XXXV. of 1920, which was passed under the then existing Indian Constitution by the Indian Legislative Council and received the assent of the Governor-General on the 9th September, 1920. It is not in our opinion open to the company to challenge in any municipal court the validity of acts which have thus received competent legislative sanction.
The second paragraph of this opinion clearly indicates the difficult position in which the Basle Company have been placed as a consequence of the course which has been taken by the Government of India and adopted by the British Government.
§
The Right Honourable L. S. Amery, then Secretary of State for the Colonies,
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in a Despatch of July 31, 1928, to the Officer Administering the Government of the Gold Coast, stated:
…. I took the best legal opinion available to me and was advised that the action taken in 1918 had in fact amounted to seizing without compensation the property and the buildings of citizens of a neutral State, and it was therefore impossible to justify in a legal action or arbitration regarding it as a war measure on the ground of the enemy association of the former owners.
The opinion of Sir John Simon and others, and the action taken by the Government in 1928, is simply, as far as I can see, entirely ignored by the India Office. The request of the Basle Company to the India Office was answered by the offer of a return of the property subject to conditions impossible of acceptance—namely, that the property must be taken over with unknown liabilities, and an intimation, in effect, that "either you accept what we offer you or you have nothing," and this notwithstanding that the confiscation took place six months after the Armistice. The Indian Government themselves had doubts about what they had done, and passed what I understand is called a Validating Act, in 1920.
§ Owing, no doubt, to some misapprehension, a statement was made in Sir Samuel Hoare's letter to me of May 21 that the directors decided to recommend to their shareholders that the India Office offer should be accepted. I made inquiry as to this, and am definitely informed that it has been made clear, throughout, that the directors were not prepared to accept an offer which included a condition involving acceptance of unascertained liabilities. In such circumstances, they could not, of course, recommend acceptance. Let it not be said abroad, I implore you, that England cares not for any wrong she has done, provided those whom she has wronged are not in a position to compel her to make restitution. I have here the correspondence on which I rely and I shall be happy, if called upon, to produce it.
§ LORD DANESFORTMy Lords, I understand that the proposal of the Basle Trading Company, made through my noble friend Lord Templetown, is to refer this long-drawn controversy to arbitration. I have read all the papers available on the subject, and I venture to say, 464 for what my opinion is worth, that that is an elementary and reasonable proposition. Put shortly, the facts are these. The Basle Trading Company was, and is, and always was, a neutral company. It owned these properties in India, amongst others, and also in the Gold Coast. The property in India was estimated to be worth £400,000, besides a large amount of cash, and the property in the Gold Coast was also extremely valuable. The Government of this country have admitted that the claim of the company to the Gold Coast property, which is in all material respects precisely the same as the present claim of the company to the Indian property, was valid, the truth being that the property in India, and the property in the Gold Coast, were confiscated, the one by the Indian Government, I suppose with the sanction of the British Government, and the other by the Gold Coast Government, no doubt with the sanction of the Colonial Office.
Both those confiscations were absolutely and entirely illegal. It is contrary to the law of nations to confiscate, either in war or at any other time, the property of a neutral, and that view was sustained, as my noble friend has said, by such eminent lawyers as Sir John Simon, Lord Justice Maugham and other eminent King's Counsel. I do not think that in law there is any answer to that. I feel confident that my noble friend who will reply for the Government will not controvert the justice of that view. The Government of this country have admitted that that view is right, because when the question of restoring the Gold Coast property came up before the Colonial Office the Colonial Secretary of that date, 1928, admitted that the claim was perfectly just, and could not be resisted with any decency or any honour by the Colonial Office or the British Government. They consequently restored the property to the Basle Company and paid them a very large sum, something like £250,000, as compensation.
In those circumstances you would have expected that the Indian Government and the Government at home would have acted upon the same view and made a similar unconditional restoration of the property of the company in India, with such compensation as the company were entitled to for the wrongful taking of their property. That was not so. As Lord Templetown has said, discussions went on 465 almost interminably, until at length the Government of India and the Government of this country were bound to accept the views put forward by the Basle Company to this extent, that they were bound to admit that they were wrong in seizing and confiscating this Indian property; but, instead of making a similar proposal to that made in the case of the Gold Coast property, they put forward proposals of a very different kind—namely, the restoration of the property with conditions which it was quite impossible for the company to accept, in regard to the Indian property.
I will not trouble your Lordships with those conditions at length. The substance of them was that the company were to take over this Indian property, of which they had been deprived for something like eleven or twelve years—now something nearer fifteen years—without any compensation for the long deprivation of the property of the company. When that condition came to be examined it was found that they were to take over this Indian property after this long period of deprivation without knowing how the property had been treated, what were the assets, and so on. The Government did give them some information, which proved wholly inaccurate. So inaccurate was it that when the proposition made by the Government came before the shareholders, it was practically unanimously rejected as not being a fair mode of dealing with the matter.
My noble friend has told us that a petition of right would not lie, according to the views of Sir John Simon. No doubt that is right, because there were certain Indian Acts of Parliament validating the illegal proceedings, which stood in the way. Therefore the company now come to the Government and make what appears to me a very reasonable offer. The Government admit an injustice has been done. No way of remedying that injustice has yet been discovered, and the company say: "Appoint two arbitrators who would deal with the matter fairly as between the two parties in controversy." That is the proposal which your Lordships have to consider. I sincerely trust that the Government will find it possible to assent to that proposal, and thereby not only do away with this long-drawn-out dispute, but do what appears, to me at any rate, to be justice for an act admitted to be illegal.
§ LORD TEMPLEMOREMy Lords, this matter has been before your Lordships' House on several occasions, the last occasion being November 28 last, when I had the honour of replying to my noble friend Lord Templetown. I need not, I think, trouble your Lordships with any details of dealings with the Basle Trading Company before November, 1929. As I stated in my speech on that occasion, in November, 1929, the company were informed in writing, after oral communications, of the conditions on which the Government of India were prepared to deal with the question of restoring their former properties to the company. My noble friend Lord Danesfort has referred to those conditions. He said they were very unfair, but the Government do not agree with that description, and I think it necessary, as I did not state what the conditions were in my speech last November, to tell your Lordships of what they consisted.
The first was that the return, subject to the verification of title of the Indian business as a going concern, should be accepted by the company in full satisfaction of all claims that they might have against the Government of Madras or the Government of India. The second was that the company should keep separate accounts of their operations in India and that all profits on the Indian business, above a fixed percentage—five per cent, was suggested—on the capital invested in India should be devoted to missionary and cither philanthropic purposes. The third condition was that the company should retain the services of the employees of the Commonwealth Trust in India, subject to their good behaviour, at least until they could find other suitable employment. As regards the second condition, I should explain that it was provided by the statutes of the Basle Trading Company that any profit exceeding five per cent. on the capital was to be handed over to a committee of trustees in order to serve the purposes of paragraph 2 (b) of the statutes. I will quote from the paragraph:
Furtherance by financial and other support of evangelical endeavours for the spreading of the kingdom of God.The Government thought, and still think, that those were very fair conditions to make. The offer made to the company in 1929 has since been under discussion. The negotiations have been very pro- 467 tracted, and I regret to say that this is to a great extent explained by the fact that three persons who were in personal charge of the negotiations on behalf of the company have unfortunately died during the interval—namely, the late Mr. Palliser, Sir George Craik, and Mr. Lawrence Jones.
§ LORD TEMPLEMORENo, I beg the noble Viscount's pardon. Sir George Craik was engaged in the negotiations, but not on behalf of the Basle Trading Company.
§ LORD TEMPLEMOREThe noble Viscount is quite right, but he had a certain amount to do with the negotiations, and on his demise his loss was very severely felt. Another contributory cause was the natural desire of the Basle Trading Company—which everybody can understand—for information as to the position of the business they would be taking over if they accepted the offer. The Government in India had no information about the business beyond what is in its published reports and balance sheets, and, in order to furnish the company with further information, it was necessary to ask the Commonwealth Trust to supply it. The Commonwealth Trust made no difficulty in answering numerous questions bearing on the present position of the business. To other questions put to them at the request of the Basle Trading Company they have returned no answer, generally on the ground that they related to the past history of the business, and not to its present position.
Negotiations continued, and eventually on December 30 last, one day before the expiration of the time limit, the directors of the Basle Trading Company formally accepted the offer of the India Office contained in the letter of November 28, 1929, subject to the approval of their shareholders. The Secretary of State agreed to hold open his offer until January 20, 1934. On January 20 of this year the Basle Trading Company informed the India Office that their shareholders were not prepared to accept the offer made to them. That is how the matter now stands. As regards the sug- 468 gestion that His Majesty's Government should appoint two impartial persons to advise on the company's claim, I am instructed to say that the Government see no advantage in this course, and do not propose to take it.
VISCOUNT TEMPLETOWNMy Lords, with reference to a point raised by the noble Lord as to profits being divided, all that the Basle Trading Company want is that the same course should be pursued, in definition of how profits were going to be divided, as was followed quite satisfactorily in the case of the Gold Coast settlement. There is no difference between those two cases. The company were quite prepared to accept that. With reference to the directors having recommended the shareholders to accept the offer, I am the recipient of a letter from the Secretary of State for India saying that the directors of the Basle Trading Company had recommended their shareholders to accept the offer. I had better tell your Lordships at once that there was not a letter which passed between the solicitors and the India Office of which I did not get a copy at once. Though I am not a negotiator and never have been, there was not a meeting that took place but what it was reported to me in writing verbatim at the earliest possible moment. Therefore I know it is perfectly impossible that the directors of the Basle Trading Company could have recommended acceptance to their shareholders.
§ LORD TEMPLEMOREI very expressly did not say they recommended it to their shareholders. What I said was that they accepted it subject to the approval of their shareholders, and then when the meeting took place their shareholders would not have it.
VISCOUNT TEMPLETOWNI shall read the letter which I received from Sir Samuel Hoare. Here it is:
Mr. Baldwin has passed on to me your letter of 17th April regarding the Basle Trading Company. As you know, the company were informed in August last that unless the offer made to them in November, 1929, was accepted in toto by 31st December, 1933, it would be withdrawn. The directors decided on 30th December, 1933, to recommend to their shareholders that this offer should be accepted, but as you are aware the shareholders at a meeting held on the 17th January, 1931, decided that they could not accept it. This being so, I am afraid there is nothing for me to 469 say in. reply to your letter except that the offer must now be regarded as withdrawn.If I am wrong as to the directors and shareholders I shall withdraw and apologise, but I do not think I am wrong. In reply to the noble Lord I have only to say this, that I very much regret his reply. It disappointed me immensely, and it only confirms me in the belief that this battle must go on being fought until it is won. Until you do the thing that is right you will never settle it, and I am not going to stop my efforts until it is finished in the right way. I beg leave to withdraw my Motion for Papers.
§ Motion for Papers, by leave, withdrawn.