793.003/583: Telegram
The Minister in China (Johnson) to the Secretary of State
Referring to my telegram of March 27, 11 a.m., paragraph No. (3).
1. Following are additional texts tentatively agreed upon by the British Minister and Minister for Foreign Affairs at latest conversation. Comment in confidential code is submitted in later telegram.82
2. Transfer of jurisdiction. [“] (1) Except (in criminal cases, other than minor offenses indicated below, and) as otherwise provided by the present treaty, British subjects in China shall as from its coming into force be subject to the jurisdiction of the modern Chinese courts of justice (Fa Yuan) and to the duly promulgated laws, ordinances and regulations in China.
(2) As regards rights of appeal and in all other matters of procedure the modern Chinese codes of law and procedure shall be applicable to British subjects. In all legal proceedings British subjects shall enjoy treatment not less favorable than that accorded to Chinese citizens.
[Page 779](3) Except as provided in paragraph (4) of this article, British subjects shall not be subject to jurisdiction of the police courts nor shall they be subject to jurisdiction of any other tribunals than the modern Chinese courts of justice.
(4) British subjects shall be subject to the jurisdiction of the modern police courts in case of offenses under the police offenses code or under municipal regulations, but in each of such cases the penalty imposed by the court shall not exceed a fine of $15, or, in the event of such fine not being paid, detention at the rate of 1 day’s detention for each dollar of the fine imposed up to a maximum of 15 days.”
3. Declaration, “With reference to the treaty concluded between us today, I have the honor to declare on behalf of my Government that the Chinese courts will ensure to the persons and property of British subjects due protection in accordance with international law and the general practice of nations.”
4. Lawyers and interpretation [interpreters?]. Additional paragraph: “In all judicial proceedings in which British subjects are summoned to appear, whether as parties to the case or witnesses, and in all court processes directly concerning British subjects, their names will, in order to avoid mistakes and misunderstandings, be added in English to the Chinese text of the summons, order or other court process.”
5. “Lawyers’ diplomas interpretation. Agreed minute of interview between the Minister for Foreign Affairs and His Britannic Majesty’s Minister: Sir Miles Lampson, referring to the matter of the registration of British lawyers, inquired whether he was correct in understanding that it was not the intention of the Chinese Government to require that duly qualified British lawyers appearing on behalf of British parties in the Chinese courts should have a knowledge of a Chinese language or possess diplomas of Chinese law schools. Doctor Wang replied that the above understanding was correct.”
6. Legal counselors. Additional matters. “There shall also be included amongst these legal counselors one legal counselor of Chinese nationality to be similarly selected and appointed from among Chinese legal experts possessing the same training, qualifications and experience.
“In all cases in which British subjects are involved as defendants a foreign legal counselor shall be present at the hearings of the cases in both the high and district courts and judgments shall be reserved until he has made within 3 days after the conclusion of the trial such observations as he may desire to the judges in chambers, and, in the event of the judges failing to give them due consideration, the execution of the judgment will be suspended until the observations of the legal counselor have been considered by the Ministry of Justice, [Page 780] which will take such action as it deems appropriate in the interest of justice.
The Chinese court of justice referred to in article 1 shall not begin to exercise jurisdiction over British subjects until the Special Chambers referred to in article 2 have been organized and until the legal counselors above mentioned have been appointed and installed in office as provided in this article.”
7. “Declaration attached to the article concerning legal counselors. Minister of Foreign Affairs to His Britannic Majesty’s Minister: With reference to the treaty concluded between us today, I have the honor to declare on behalf of my Government that the legal counsel referred to in article (blank) of the above-mentioned treaty will be engaged and employed by the Chinese Government under contracts specifying in detail the duration and the terms of their service, including in the case of each foreign legal counselor total emoluments of not less than £3,000 (sterling) additional compensation, to be paid in quarterly installments, the said quarterly installments to be deposited in such bank or banks as the legal counselor concerned may indicate 6 months ahead of the time when such installments fall due.
I have also the honor to declare, with reference to the arrangements provided in the article above mentioned, that as far as practicable a legal counselor of British nationality will officiate at the trial of cases involving British subjects.”
8. Taxation, “(b) British subjects shall be protected against taxation without legal sanction and against irregular or discriminatory methods of assessing or levying taxation; and such legal taxation as is properly payable by British subjects shall be enforced against them by no other process than that of action in the competent modern Chinese courts of justice.
(c) Municipal taxation shall be imposed upon British subjects only in accordance with duly authorized municipal regulations sanctioned by the Central or Provincial Governments in China. The proceeds of such municipal taxation shall in general only be expended on relevant purposes within the municipal area in question.
(d) No methods of assessing liability to taxation shall be employed except those prescribed by the duly promulgated laws, ordinances and regulations of China. In case of disputed assessments, the party concerned shall be entitled to have the amount of his levy determined by the competent modern courts in accordance with Chinese law.
(e) Tax agreements entered into with British subjects in their several capacities as merchants, firms, partnerships or companies, will be duly observed.”
9. Arbitration. [“] (1) The Chinese courts will recognize and if necessary secure performance of agreements entered into at any place [Page 781] by British subjects between one another or with other foreign nationals or with Chinese citizens for the settlement of civil or commercial controversies by arbitration. The arbitrators selected by the parties in accordance with such agreements may be of any nationality.
(2) The arbitration if held in China shall be conducted in accordance with the procedure prescribed by Chinese law.
(3) The Chinese courts will not entertain any application or claim which forms the subject matter of such an agreement for arbitration, but will enforce awards made in pursuance of such agreements unless the award is contrary to public order or good morals of [or] is vitiated on other grounds recognized by the general principles of law as understood in modern jurisprudence.
(4) The above provisions shall apply mutatis mutandis to agreements for arbitration entered into by Chinese citizens and the enforcement of the awards made in pursuance thereof by the British courts in Great Britain.
See also the attached letter: ‘With reference to article (blank) of the treaty concluded between us today, I have the honor to confirm Your Excellency’s understanding that the Chinese arbitration law of (blank) has no application to arbitration agreements of the kind contemplated in the said article’”.
10. Rights in immovable property. “Any dispute regarding the amount of compensation to be paid shall be determined by reference to the competent administrative organ or the competent modern court of justice at the option of the British subject concerned in accordance with Chinese law”.
11. Rights in immovable property. Exchange of notes. “In reaching their decisions in such cases the Chinese courts shall take into consideration the treaty provisions and laws and the customs and practices in various parts of China which existed at the time when the property rights were acquired”.
12. Military service, forced loans, et cetera. “Subject [to] similar exemptions being enjoyed by Chinese citizen[s] in Great Britain, British subjects in China shall not be subjected to any form of military service or to any tax or levy imposed as a substitute for military service or to military requisitions or contributions of any kind, nor shall they be liable or compelled to subscribe, directly or indirectly, to any public loan or to any other form of forced levy”.
13. Treatment of companies. “So long as in Great Britain Chinese companies, firms, partnerships or corporations enjoy as regards taxation, the right to carry on business and access to the courts, treatment not less favorable than that accorded to the companies of the most favored foreign country, companies, firms, partnerships and corporations incorporated or organized in accordance with the laws of [Page 782] His Britannic Majesty and operating in China shall, provided they comply with the provisions of Chinese law relating to the registration of companies, be entitled to all the rights and privileges enjoyed by British subjects under this agreement, including the rights enjoyed in Chinese courts, whether as plaintiffs, complainants or defendants. Such companies, firms, partnerships or corporations and their branches, agencies or representatives shall not be subject to discriminatory treatment, and as regards national, provincial and municipal taxation shall only be taxed in proportion to the amount of capital actually employed respectively in China, in the province or in the municipality, or in respect of the profits and revenues which they have actually earned respectively in China, in the province or in the municipality”.
14. Nondiscriminatory treatment. “Subject to reciprocity of treatment for Chinese citizens in Great Britain, British subjects shall enjoy in all matters for which this treatment provides all exemptions from Chinese jurisdiction which may be enjoyed by the nationals of any other country and shall be subjected to no discriminatory treatment in regard to taxation, judicial or any other matters for which this treaty provides, as compared with the nationals of any other country.”