362.115 St 21/383

The Secretary of State to the Associate General Counsel of the Standard Oil Company ( Wellman )

Sir: I am in receipt of your letter of June 3, 1925,50 in regard to the Ex-D. A. P. G. Tankers. You state that the arbitration in this case was held under the arbitral agreement as amended, made at Paris by the Reparation Commission and the United States Government represented by Mr. Boyden, that when the case was submitted to the arbitrators the Standard Oil Company was represented by Mr. Montagu Piesse, who had been thoroughly in touch with the discussions leading up to the Tanker Agreement, and that the immediate question which you desire to have the Department consider is whether or not the United States Government shall be represented by counsel on the proposed submission of the Tanker case to the arbitrators when the third arbitrator is called in because of the disagreement of the two arbitrators who have heard the case.

This case was not referred to arbitration through a direct formal agreement between the United States and another foreign power, nor did the United States designate counsel to conduct the case before the arbitrators. The Department does not consider that it would be appropriate for it to designate counsel at this stage of the proceedings to serve with counsel for the Standard Oil Company in presenting the case to the tribunal constituted under the arbitral agreement when the third arbitrator is called in because of the disagreement of the two arbitrators before whom the case has been argued. It may be observed in this connection that in view of the apparent disagreement of the two arbitrators on the question whether the Standard Oil Company has failed to make good its claim to beneficial ownership of the tankers, it would seem that the decision will, in effect, rest with the third arbitrator upon a consideration of the facts and arguments already presented to the two arbitrators by counsel for the Reparation Commission and by counsel for the Standard Oil Company, and that no material advantage would in any event be derived from having counsel designated by the United States take up the case de novo.

[Page 170]

Mr. Ralph Hill, who is familiar with the issues involved in the Tanker case, is, as you are aware, now Acting American Observer with the Reparation Commission and is keeping in touch with developments in the Tanker case. Mr. Hill will doubtless render to counsel for the Standard Oil Company all proper assistance short of acting as counsel for this Government, in presenting the case of the Standard Oil Company to the third arbitrator.

For your information it may be stated that the Department is in receipt of a telegram from Mr. Hill51 in which he states that he has been endeavoring, through Mr. Bayne, but without success, to ascertain whether Mr. Sjoeborg will be in a position to serve as the third arbitrator. Mr. Hill added that he would see that the Department and your company are consulted in regard to the selection of the third arbitrator in the event that Mr. Sjoeborg cannot serve.

With reference to the inquiry contained in your letter under acknowledgment as to whether the arbitrators have filed their respective formal decisions in this case, it may be stated that the Department appears to have received no definite information as to what action the arbitrators may have taken after it became apparent that the case would probably be referred to the third arbitrator. However, Mr. Hill has been requested to submit a report on this point and upon the receipt of his reply the Department will communicate with you again.

I am [etc.]

Frank B. Kellogg
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