§ Mr. Hazell
asked the Secretary of State for Commonwealth Relations if he will make a statement on the position arising from the vesting in and requisitioning for the Ceylon Petroleum Corporation of property and assets of the Shell Company of Ceylon Ltd.
§ Mr. Bottomley
The position has developed satisfactorily since 26th July, 1963, when the right hon. Member for Streatham (Mr. Sandys)—the then Secretary of State for Commonwealth Relations—in a written reply in relation to this matter, informed the then hon. Member for Hornsey (Lady Gammans) that whilst the British Government did not contest the right of any Government to nationalise undertakings in its territory they expected that in such an event prompt, adequate and effective compensation in accordance with the principles of international law would he paid to the British interests which might be affected.
The Ceylon Government have recognised their obligation to pay compensation and have agreed with the Shell Company that in determining the appropriate amount due the principle of fair market value should be recognised as applying to the overall settlement of the Shell Company's claim. The terms of the settlement were embodied in an Agreement between the Ceylon Government and the Shell Company which was signed in Ceylon on 22nd June, 1965, and the Ceylon Parliament has enacted legislation to give legal effect to that Agreement. The British Government are happy that the Shell Company's claim should have been settled on a basis which is satisfactory both to the Ceylon Government and to the Company and it is a 159W matter of satisfaction to them that the Agreement recognises that, in determining the appropriate compensation due, the principle of fair market value applied to the overall settlement.