Suez Canal Company and Egypt (Agreement) (Hansard, 5 May 1958)

§ Mr. Simon

The main features of the Agreement between the Company and the Government of Egypt are that the Company retains its assets and liabilities outside Egypt while Egypt retains the assets and liabilities in that country. In addition, the Egyptian Government pays the equivalent of £E28.3 million in French francs and sterling calculated by reference to the International Monetary Fund parity between the Egyptian pound and the United States dollar in compensation to the Company. Of this £E5.3 million, which presents the equivalent of dues paid to the Company after 26th July, 1956, is already in the Company's possession. The balance will be paid in six equal annual instalments starting 1st January, 1959. The payment of the instalments may be advanced if Her Majesty's Government permit a specific release from Egypt's No. 2 Account for this purpose, or in the event of the release of the whole of the No. 2 Account. In all the circumstances Her Majesty's Government regard this Agreement as reasonably satisfactory. The Nationalisation Decree of 1956 left many details unsettled, but the present agreement appears to secure a more advantageous financial settlement to the Company. In particular the Company retains its profitable assets outside Egypt and payment is guaranteed in transferable currencies. I have no doubt that the Company will in due course explain in more detail the precise financial consequences.

83W

Following is the text of the Agreement:

HEADS OF AGREEMENT

The representative of the Government of the United Arab Republic (as successor to the Government of Egypt), and the representatives of the Suez Stockholders, namely, the shareholders, the holders of founder shares, and the holders of the Parts Civiles (Société Civile pour le recovrement des 15% des produits nets de la Compangnie Universelle du Canal Maritime de Suez attribués au Gouvernement egyptien), hereinafter referred to as "the Stockholders", have agreed the following Heads of Agreement: 1. As a full and final settlement of the compensation due to shareholders and holders of founders shares as a consequence of the Nationalisation Law No. 285 of 1956, and in full settlement of the claims of the holders of the Parts Civiles, the Government of the United Arab Republic will make a payment equivalent to £.E.28.3m. (twenty-eight million and three hundred thousand Egyptian Pounds) and will leave all the external assets to the Stockholders. 2. In consideration of the above, the Stockholders will accept responsibility for all liabilities outside Egypt as of July 26, 1956, including liability for the service of the outstanding debentures (principal and interest) and for pensions in accordance with paragraph 4 (b) below. 3. The Government of the United Arab Republic will continue to assume responsibility for all liabilities within Egypt as of July. 26. 1956, including liability for pensions in accordance with paragraph 4 (a) below. 4.—(a) The Government of the United Arab Republic will assume liability for pensions, as follows:

(i) Pensions already granted as of July 26, 1956, and being paid by Egypt to pensioners resident in Egypt on the date of signature of the present Heads of Agreement;
(ii) Pensions accruing to staff who were employed in the service on July 26, 1956, and who are still in the service of the Suez Canal Authority, or who, having remained in the Authority's service, retired on pension after that date in accordance with the regular pensions regulations.

(b) The Stockholders will assume liability for all pensions other than those specified in (a) below, (c) Each party to these Heads of Agreement will afford facilities for the preparation of lists of individual pensioners falling within the various categories mentioned in this paragraph 4 in order that the liability for payment of pensions to each individual may be properly determined. (d) The Stockholders will pay to the Government of the United Arab Republic the capital value of the pensions payable to persons who, having remained in the Authority's service after July 26, 1956, retired on pension after that date in accordance with the regular pensions regulations, but ceased to reside in Egypt prior to the date of the signature of these Heads of Agreement 84W and who, at the date of signature of these Heads of Agreement, do not receive their pension from the Stockholders. (e) Liability for pensions after the date of signature of these Heads of Agreement will not be affected by any subsequent change of residence by a pensioner.

5. The payment specified in paragraph I will be made as follows:

(a) An initial payment of £E5–3m. (Five million and three hundred thousand Egyptian Pounds), through the retention by the Stockholders of the transit tolls collected in Paris and in London since July 26, 1956.
(b) The balance in instalments as follows:

January 1, 1959 £E4m. (Four million Egyptian Pounds).
January 1, 1960 £EAm. (Four million Egyptian Pounds).
January 1, 1961 £E4m. (Four million Egyptian Pounds).
January 1, 1962 £E4m. (Four million Egyptian Pounds).
January 1, 1963 £E4m. (Four million Egyptian Pounds).
January 1, 1964 £E3m. (Three million Egyptian Pounds).

6. The instalments specified in paragraph 5 (b) above will be free of interest and will be payable in Pounds Sterling in London or in French Francs in Paris, calculated at the fixed rate of U.S.$2.8715576 to £E1. Not less than 40 per cent. of each instalment shall be payable in Pounds Sterling.

7.—(a) If the Government of the United Kingdom provides a special release from Egypt's No. 2 Sterling account for the specific purpose of making advance payments on the instalments specified in paragraph 5 (b), amounts so released will be paid over forthwith by the Government of the United Arab Republic for application to the payment in advance of the two next maturing instalments specified in paragraph 5 (b).

(b) In the event of a release by the Government of the United Kingdom of the total of Egypt's No. 2 Sterling account, the Government of the United Arab Republic will pay over forthwith an appropriate amount of the funds so released for application to the payment in advance of the two next maturing instalments specified in paragraph 5 (b).

(c) If either of the releases under (a) or (b) above takes place before the effective date of the final agreement referred to in paragraph 9 below, the appropriate amounts will be paid over forthwith on the effective date.

8. The conclusion and implementation of the final agreement referred to in paragraph 9 will be done in such a way that the rights and liabilities attributed to the Stockholders under the present Heads of Agreement are effectively exercised and assumed by an entity acceptable to both parties as representing regularly all the Stockholders and duly qualified to give full and final discharge to the Government of the United Arab Republic.

85W

9. In view of the fact that the present Heads of Agreement have been negotiated under the good offices of the International Bank for Reconstruction and Development, the Bank have accepted the capacity of the signatories for the purposes of concluding the present Heads of Agreement, the parties hereby request the Bank to continue its good offices until the conclusion and documentation of a final agreement implementing these Heads of Agreement and to act as fiscal agent for the purpose of receiving and paying out the monies provided for in paragraphs 4 (d), 5 (b) and 7 above.

Done in triplicate at Rome on 29th April, 1958, in the presence of a Vice President of the International Bank for Reconstruction and Development. One copy to be retained by the Government of the United Arab Republic; one copy to be retained by the Representatives of the Suez Stockholders; and one copy to be deposited in the archives of the International Bank.

On behalf of the Government of the United Arab Republic:

Signé: Abdel Galeel E1 Emary.

On behalf of the Suez Stockholders:

Signé: J. Georges-Picot.

Charles M. Spofford.

John Foster.

Witnessed by:

Signé: W. A. B. Iliff,

Vice-President.

International Bank for Reconstruction and Development.

Rank	Royal Navy (including Royal Marines)	Army	R.A.F.	Total
(Army rank used for convenience)
General Officers	…	178	104	7	289
Brigadier	…	—	199	8	207
Colonel	…	166	285	15	466
Lieutenant-Colonel	…	402	570	14	986
Major	…	169	635	24	828
Captain	…	607	646	21	1,274
Lieutenant	…	12	149	17	178
Senior Commissioned Officer (R.N.)	…	146	—	—	146
Commissioned Officer (R.N.)	…	363	—	—	363
Total	…	2,043	2,588	106	4,737

These figures exclude the pensions payable as a result of death due to service in the 1914–1918 and 1939–1945 wars or since: these pensions are administered