HISTORY OF DISPUTE

Evening Star, Issue 20633, 5 November 1930, Page 9

HISTORY OF DISPUTE

RUSSIAN WORD BROKEN. CONCESSION RENDERED USELESS. The history of the dispute between the Lena Goldfields Limited and the Soviet Government was related in ‘ The Times ’ recently by Major Guy Kindersley, M.R., who said:— The Lena Concession was signed at Moscow on November 14, 1925, by the Soviet Government, represented by the President of the Supremo Council of People’s Economy, F. E. Dzerjinsky, of the one part, and Lena Goldfields Limited, London, represented by F. W. D. Gwynne, acting under power of attorney of the Lena Goldfields Limited London, of tho other part. More than £3,500,000 has been spent on development work, machinery, and construction work up to 1930. The Lena Concession was tho largest foreign concession in the Soviet Union. The company controlled tho largest gold placers m the country, producing during tho first years of tho concession more lhan eight tons of gold a year, the largest copper mines in tho Ural mountains, the largest base metal deposits in tho Altai, and great steel works in the Urals, besides coalmines, etc. These enterprises, controlled by English capital before the revolution and then nationalised, were taken over again in 1925 on a concession basis by their previous owners, in consideration of claims being waived for compensation and an undertaking by the company to fulfil a groat development programme. The programme was started in 1925 with a view to completing the major portion of it in 1930. It was anticipated that when the major portion of it was completed it would result in an annual profit to tho company of about £2,000,000. The capital of tho company is £4,652,500. in addition to the very large amount held by the British public, more than 1,000,000 of the company’s shores are held in America and approximately 500,000 in France. RAID ON COMPANY’S PROPERTY. Everything was going more or less well with the concession until about tho autumn of 1929. Then a complete change took place in tho concession policy of the Soviet Government, which began to force the company out of Russia almost on the eve of the completion of tho first stage of its development programme. A raid by the Ogpu, or secret police, was made in December, 1929, upon the Lena properties—not merely upon a few selected places, but upon every office and every dwelling of tho entire organisation at Moscow, Leningrad, the Altai, the Urals, Novo-Sibirsk, Irkutsk, and the Lena mines. This raid made further work on the concession impossible, as tho entire staff became so demoralised by terror that it was entirely unable to carry out its duties. Private files of tho company were confiscated, in itself a drastic violation ot tho concession agreement. The company’s chief metallurgist, Koliasnikoff, chief legal adviser, Muromtzeff, and some other important engineers and employees of the company were arrested. Koliasnikoff and Muromtzeff have each since been sentenced to six years’ imprisonment on the charge of espionage and counter-revolutionary activity. To complete the destruction of the company, tho trial of Koliasnikoff and Muromtzeff was staged by the Soviet Government in tho Supremo Court at Moscow, where Koliasnikoff and Muromtzeff, obviously terrorised by tho well-known methods of the Ogpu, and throats of a death sentence, turned into State witnesses, accusing the company and its chief officials of counter-re-volutionary plans and espionage. The judgment of this court, in open defiance of the concession agreement, which provides that no differences between the company and tho Soviet Government can bo tried elsewhere than by the Court of Arbitration, made it impossible to continue tho work in Russia and forced tho company to recall its foreign employees, as it could no longer bo responsible for their safety. SOVIET CANCELS COURT OF ARBITRATION. Tho company, realising the impossibility of continuing operations, summoned tho Soviet Government to a Court of Arbitration, notifying the Soviet Government that it had appointed Sir Leslie Scott its arbiter, and asking it to nominate the Soviet’s arbiter. In reply to this summons tho Soviet Government accepted tho arbitration and appointed Dr Tchleuov its arbiter. In accordance with tho concession agreement the Soviet Government then submitted to the company the names of six professors of tho Freiberg Academy, from which tho Lena Goldfield« Limited had to choose tho super-arbiter, and Lena Goldfields Limited chose ono of these, Professor Stutzer, as tho super-arbiter. The first meeting of tho Court of Arbitration was called by the superarbiter on April but at tho joint request of tho Soviet Government and tho Lena Goldfields this mooting was postponed until May 9 to take place at Berlin. To the company’s surprise the Soviet Government telegraphed that it had cancelled tho Court of Arbitration and had so notified tho superarbiter. Nevertheless, the first meeting of the Court of Arbitration took place at tho Adlon Hotel in Berlin on May 9.

The protocol disclosed that whereas tho Soviet Government had appointed its own arbiter, and had agreed to the super-arbiter, it had cancelled its agreement at the last moment, and had refused to send its nominee.