“The general public does not yet seem to realize clearly the issues that are involved in the matter of Persian oil.

The oil belongs and always has belonged to Persia, and the Anglo-Iranian Oil Company merely have a license to develop and market those natural resources by agreement with the Persian Government.

The agreement is valid until 1993, and under it the Persian Government undertook never to alter the position of the company, by legislation or in any other way, except by agreement with the company itself.

[The 1933 Agreement extended the term of the 1901 D’Arcy Concession from 1961 to 1993]

The essential point, therefore, is not the right of a sovereign power by its legislation to nationalize commercial enterprises, nor is it the measure of compensation it should pay for doing so. The real issue is the wrong done if a sovereign state breaks a contract which it has deliberately made not to exercise such a right.

[As former AIOC official L. P. Elwell-Sutton put it, “...the British attitude was that, in return for their recognizing the principle of nationalization, the Persian government should forego its insistence on that principle.”]

In other words, what it would appear that the Persian Government are now trying to do is to break a legal contract and take over the assets of the company, many of which, I need hardly say, would never have been put into Persia if the company had not relied on the sanctity of its contract.

This the Persian government have no legal right whatever to do except by agreement.”