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exercise by His Majesty s Government of the powers conferred by this sub-clause.
Any such compensation shall be settled by agreement between His Majesty’s
Government and the Company or, in default of agreement, by arbitration in the
manner provided by sub-clause (3).
Signed, Sealed and Delivered by the said 'i
John Charles Walton on behalf of
His Majesty’s Government in the J. C. Walton (L.S.)
presence of: j
H. S. Painter.
India Office.
The Common Seal of Petroleum Con­
cessions Limited was hereunto affixed > (Seal)
in the presence of:
John Cadman, Director.
E. J. Brown, Secretary.

(a)
Letter, dated May 22, 1937, from the Political Agent, Bahrain, to the Ruler of
Dubai on the subject of the Political Agreement
His Majesty's Government have been furnished with a copy of the Agreement
[No. 2] signed by you on the 22nd May 1937 granting to Petroleum Development
(Trucial Coast), Limited, which is a subsidiary Company of Petroleum Concessions
Limited,.an oil concession in respect of your territory on the understanding that the
Agreement is subject to the approval of His Majesty’s Government.
2. Under instructions from His Majesty’s Government I now enclose a copy
of an Agreement (No. 6) which has been concluded between His Majesty’s Govern­
ment and Petroleum Concessions, Limited, in London on 5th February 1937.
3. It is desirable that there should be a clear understanding as to the position
which would arise in certain eventualities in connection with these two Agreements,
and I am to inform you that in these circumstances the understanding described
below has been reached with the Company: —
{a) Should any of the terms of the Agreement between you and the Company
be inconsistent or in conflict with the terms of the Agreement between
the Company and His Majesty’s Government signed in London on
5th February 1937 the Agreement between you and the Company will
to the extent of any such inconsistency or conflict be subordinate to
and be controlled by the terms of the Agreement between the Company
and His Majesty’s Government.
(b) If the Company should fail to observe any of the terms of the Agreement
between the Company and His Majesty's Government signed in London
on 5th February 1937, or if the alleged failure having been disputed by
the Company the matter has been referred to arbitration under
Article 24 of the Company’s Agreement with you (which is made
applicable to the case by Article 11 of the Agreement between the
Company and His Majesty’s Government) and the Company should
not remedy such failure within the reasonable time which should be
fixed by the arbitrators for so doing then in these cases, as in the
cases mentioned in Article 19 of the Company’s Agreement with you,
but in no other, the Company agrees that you will be entitled to
terminate the Agreement between the Company and yourself, and that
all properties of the Company within your territory shall become your
property and that they will hand over to you free of cost land granted
to the Company by you and any lands or buildings which the Company