No. 346.
Mr. Farman to Mr. Fish.

No. 94.

Sir: I have the honor to transmit herewith a copy of a dispatch received from Chérif Pasha, dated December 23, 1876. It relates to a conflict of jurisdiction which has arisen in a number of instances since the inauguration of the new tribunals between these tribunals and the consular courts in cases of bankruptcy. The dispatch is accompanied with a report of the new court of appeal of Alexandria, which, after giving to some extent a history of the conflict of jurisdiction and the conflicting decisions of the tribunals of Alexandria, Cairo, and Ismaïlia, and its own construction of article 9, section 2, Title I, of the réglement d’organisation judiciaire, closes with the following statement:

The conclusions of the court can be summed up in the following propositions:

1st.
It is for the interest of foreigners as well as of natives to grant to the mixed tribunals, by a supplementary article of the réglement d’organisation judiciaire, the [Page 621] exclusive jurisdiction in matters of bankruptcy, whatever be the nationality of the bankrupt or that of his creditors.
2d.
The competence of the tribunal (mixed) is, according to article 9, section 2 of Chapter I of the réglement d’organisation judiciare, for mixed cases, incontestable and exclusive in a bankruptcy matter when all interested do not belong to the same nationality as the bankrupt.
3d.
It would be desirable that the consular tribunals and the local tribunals, when called upon to declare the bankruptcy of a merchant who is subject to them according to the statut personnel, should be required before declaration to examine the accounts and the commercial books of the debtor, in order to ascertain the nationality of the creditors, and in case of need to take other information in regard to it.
4th.
The consular tribunals as well as the local tribunals ought to be required to recognize their incompetence in every state of the case, when it is shown them that in the bankruptcy there is concerned the interest of a creditor belonging to another nationality than the bankrupt. In submitting these conclusions to your excellency I have the honor to pray you in the name of the court to take the necessary steps in order to obtain the consent of the powers to the supplementary article proposed by the conclusion No. 1, and at the same time to engage the powers to give to their consular judges from this time such instructions as, in conformity with the spirit of the réglement d’organisation judiciaire and with the principles established in the conclusions Nos. 2, 3, and 4, shall prevent all occasion for conflict. His excellency Chérif Pasha in his dispatch expresses his concurrence in the views of the court, and says that “the Government of the Khédive hopes that the American Government in presence of the weighty considerations that have determined these views will be pleased to agree with them and grant its high sanction to the application of the means proposed, which will be a new guarantee for the success of the reform to which it has always lent so efficacious and so kind a support.”

In addition to the facts set forth in the report, I may add that there have been cases in Cairo during the past summer in which the sheriffs of the mixed tribunals and the marshal of a consular court have at the same time been upon the premises of a bankrupt, each under orders of their respective courts, striving to gain possession of his property.

There can be no doubt of a necessity for some arrangement to prevent the recurrence of similar conflicts.

After a careful examination of the subject, it seems to me that the second proposition of the conclusions above given of the court is a correct interpretation of article 9, section 2, Title I, of the réglement d’organisation judiciaire. This article reads as follows: “Cestribunaux connaîtront seuls de toutes les contestations en matière civile et commerciale entre indigènes et étrangers, et entre étrangers de nationalités différentes en dehors du statut personnel. Its connaîtront aussi de toutes les actions rèelles immobilières entre toutes persounes, même appartenant à la même uationalité.” (These courts alone shall have jurisdiction in all disputes in civil and commercial matters between natives and foreigners, and between foreigners of different nationalities outside of the personal statute. They shall also have jurisdiction in ail real-estate actions between all persons, even belonging to the same nationality.)

This, applied in cases of bankruptcy, would seem plainly to give the mixed tribunals exclusive jurisdiction in all cases where any one of the creditors was of a nationality different from that of the bankrupt.

This being admitted, the measure suggested in propositions 3 and 4 of the conclusions of the court are, so far as I can judge, only just means for the application of the law according to its true intent. As to the propriety of adding, as suggested in the first proposition, a supplementary article to the règlement d’organisation judiciaire, giving exclusive jurisdiction, in all matters of bankruptcy, to the new tribunals, whatever may be the nationality of the bankrupt or of his creditors, there may be some doubt, for the reason that the law and practice in bankruptcy, as applied by these tribunals, are very different from our own or that of England or France, and, should occasion require their application, would be regarded as too severe.

[Page 622]

It is, however, true that there is not the least probability of a case ever arising in Egypt in which the bankrupt and all his creditors would be citizens of the United States.

Practically, the adoption of this new article would never affect us.

But it is doubtful, from what I learn, whether England and France, who might possibly have cases in which all interested would belong to their own nationality, will consent to the change.

For the reason stated, I recommend a concurrence on the part of our government in the measures suggested in propositions 3 and 4, and, should the other powers consent thereto, as it would not practically affect American citizens, I should also recommend that assent be given to the adding of the supplementary article mentioned in the first proposition.

Will you please give me instructions to act in accordance with the above views, provided they meet with your approval?

I am, &c.,

E. E. FARMAN,
United States Agent and Consul-General.
[Inclosure.—Translation.]

Chérif Pacha to Mr. Farman.

conflicts of authority in bankruptcy between the consular courts and the new tribunals.

Mr. Agent and Consul-General: During the judiciary term which has just ended, conflicts as to competence in bankruptcy cases have taken place between the consular courts and the tribunals of the reform. These disputes may be renewed, and give rise to serious complications, because, as a general rule, bankruptcies in Egypt involve multifarious interests and persons of different nationality.

To adopt a method of procedure which anticipates these complications and simplifies the action of justice, this will be evidently to answer the needs of all those who find themselves obliged to have recourse to that action.

The new magistrates called upon to examine the situation have considered it from all points, and have set forth their opinion, voluminously elaborated and reasoned, in a report, which Mr. Lapenna, vice-president of the court of appeal, has lately addressed to me.

I have the honor to place this report before you, Mr. Agent and Consul-General, recommending your attention to it.

The considerations of fact and of law which it contains emanate from magistrates whose experience and authority in such matters are apparently indisputable.

The conclusions which are therein set forth are but the direct consequence of these considerations, which all concur in demonstrating the grave inconveniences of the actual state of things, and the necessity for their remedy by the adoption of a system capable of unifying the action of justice, at present too divisible, and thus avoid the conflicts which this division may entail.

I believe, therefore, that I cannot do better, Mr. Agent and Consul-General, than to transmit to you the report just as it has been transmitted to me, which appears to be the most exact and impartial statement of the situation and of the best means to regulate it.

In agreeing with the views of the new “magistrature,” with no other object than the interests of justice, that is to say, the interests of all, the government of the Khédive, Mr. Agent and Consul-General, hopes that the American Government, in presence of the weighty considerations which have determined these views, will be pleased to agree with them and grant its high sanction to the application of the means proposed, which will be a new guarantee for the success of the reform to which it has always lent so efficacious and so kind a support. Receive, Mr. Agent and Consul-General, the expression of my high consideration.

The minister of foreign affairs and of justice,
CHÉRIF.