[Enclosure]
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 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; and
Whereas the parties desire to put an end to
these differences:
The Government of Bolivia, duly represented by . . . . . . . . , and
the Standard Oil Company of Bolivia, duly 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
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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 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)
- Are there any taxes, over and above those paid by the
Company, due the Government from the Company, and if so,
what is the amount thereof?
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
developed and undeveloped areas covered by the contract and to
transport, refine and sell the same. The term “properties” in the
same paragraph refers to the wells, roads, buildings of every
nature, pipelines, installations, machinery, refineries, furniture
and fixtures, utilities, inventories of materials and petroleum,
credits and surface rights of the company pertaining to the
operation of the contract concession immediately prior to March 13,
1937.
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 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.
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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 per annum 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 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
counterclaims 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)
