Presumably, if the attached redraft of an agreement is finally approved
by the Department, a copy of it will be sent to Mr. Armstrong, for his
information and any further suggestions that he may wish to make, before
it is presented to the Bolivian Minister.
[Annex]
Proposed Agreement Between the Bolivian Government
and the Standard Oil Company of Bolivia
Whereas differences have arisen between
the Bolivian Government and the Standard Oil Company of Bolivia
growing out of the cancellation [Page 344] on March 13, 1937 by the Government of the
concession contract dated July 27, 1922, under which the Company was
operating in Bolivia; and
Whereas the Government of Bolivia alleges
that the Company has failed to pay certain taxes due to the
Government as set out in the preamble of the Decree of March 13,
1937; (this may have to be changed to eliminate reference to the
Decree to make the scope of the tax claims broader) and,
Whereas the parties desire to put an end
to these differences: The Government of Bolivia, duly represented by
. . . . . . . . . . . . , and the Standard Gil Company of Bolivia,
represented by . . . . . . . . . . . . . , freely agree to the
following terms of settlement:
1. There shall be established a Commission consisting of three
members, two of whom must be either engineers or geologists, one to
be designated by each party within thirty days following the
signature of this agreement, and the third member, who shall preside
and who shall not be a national of either Bolivia or the United
States. The third member shall be a jurist of outstanding ability.
He shall be selected by mutual agreement between the parties;
provided, however, that if the parties shall fail to agree upon the
selection of the third member within thirty days from the date of
the signature of this agreement, the selection shall be left to the
President of the Geological Society of London, referred to in
Article 17 of the concession contract between the Government and the
Company, dated July 27, 1922, who shall make the selection within
thirty days from the date upon which either the Government or the
Company shall notify him of their disagreement.
2. The only questions to be submitted to the Commission are as
follows:
- (a)
- What was the value in the United States dollars of the
rights and interests of the Company in Bolivia under its
concession contract of July 27, 1922, and of its properties
connected therewith, immediately prior to March 13,
1937?
- (b)
- What amount of taxes, if any, over and above those paid by
the Company, is due the Government from the Company.
3. It is the intention of the parties that the Commission shall not
question or consider the validity of the concession contract of July
27, 1922 or of the cancellation decree of March 13, 1937.
In determining the question under paragraph 2 (a) hereof the Commission will take into account the right
granted to the Company under its contract to extract oil from the
area covered by the contract and to transport, refine and sell the
same.
4. The procedure of the Commission shall be as follows:
- (a)
- Within sixty days from the date of the selection of the
third member, the Commission shall convene at Buenos Aires
or at such [Page 345] other
place as it may find appropriate and shall within an
additional period of one hundred fifty days make a fair and
impartial determination of the questions submitted under 2
(a) and (b);
- (b)
- Each party shall submit to the Commission and to the other
party within ninety days from the date of signature of this
agreement a complete written statement of its case, together
with such evidence as it may see fit to submit; Provided
that, if the Commission does not convene within the said
period of ninety days, the submission of the statements
shall be made within thirty days after the date when it
convenes.
Within sixty days after the filing of the last of the two statements
just mentioned, each party may submit to the Commission such written
arguments and additional evidence in rebuttal of the arguments and
evidence submitted by the other party as it may desire to
submit.
No further argument or evidence shall be submitted by either party
unless requested by the Commission, and any request made by the
Commission for additional written or oral statements or evidence
shall be communicated to both parties and each shall have an
opportunity to respond to the request;
- (c)
- Each party shall pay the honorarium and expenses of the
member of the Commission designated by it and shall bear its
own expenses. The expenses of the Commission, including the
honorarium of the third member, shall be borne in equal
moieties by the two parties;
- (d)
- The decision of the Commission shall be by majority vote
and shall be accepted by both parties as final and
binding.
5. The Government agrees that the amount determined under 2” (a) shall be paid to the Company with interest
at the rate of 6 percent from March 13, 1937, within twelve months
from the date of the decision of the Tribunal, in cash, in United
States currency or its equivalent in sound free exchange currency.
The Company agrees that it will pay with interest to the Government,
in Bolivianos within twelve months any such taxes as may be found
due under 2 (b), with interest at the same
rate, from the date when such taxes became due. Thereafter no issue
will remain pending between them and there will be no occasion, on
the one or the other part, for any subsequent claims or
counter-claims of whatsoever character, since the fulfilment of the
present agreement, which has been freely entered into, shall be
regarded as having terminated satisfactorily and amicably the
existing differences between the Government and the Company. If all
the terms of this agreement are not duly fulfilled by either party,
it is understood that the status quo ante as
of the date of this agreement shall be deemed restored at the option
of the aggrieved party.
In faith of which, et cetera.
(Place and date of signature)
