File No. 422.11G93/582.
The American Chargé d’Affaires to the Secretary of State.
Quito, March 8, 1913.
Representatives of the Government of Ecuador and attorneys for the Railway Company have been discussing bases of submission for arbitration wherein the Government tentatively agreed, for the sake of courtesy, that the oath be administered to the arbitrators by the President of the Supreme Court and stipulated that the arbitrators should act as amiables compositeurs.
The said representatives suddenly changed in attitude on March 6 regarding the finality of the award to be rendered and the obligation of prompt payment of such sums as may be awarded, insisting that this is a question for determination subsequent to the award.
The fact that Ecuadorean law provides that an award is not final unless so stipulated in the submission makes clear the purpose reflected in the above-mentioned attitude of the Government.
[Page 484]Papers were served today on the Company in a proceeding to compel the taking of the oath before an inferior court and to oblige the American Arbitrator to submit to the jurisdiction of this local tribunal. This is apparently a repetition of the effort made by the Government attorney to cite the President of the United States to appear and act as arbitrator or to arbitrate a question in accordance with article 27 of the railway contract. At that time it was finally recognized by Ecuador that communication with the President should be made through diplomatic channels, which resulted in the appointment of an arbitrator.
In view of this, and of the evident intention of the Government of Ecuador to maintain that recourse to the local courts is still open in case of an award unsatisfactory to the Government, the American Arbitrator will refuse to recognize the right of any Ecuadorean court to compel him, acting in the matter instead of the President of the United States, to submit to their jurisdiction and procedure. Telegraphic instructions are requested.
The Arbitrator’s despatch of March 5 is concurred in by the Legation.
I would respectfully recommend a firm attitude toward the Minister of Ecuador, about to arrive at Washington, A further delay may threaten the very existence of the railroad enterprise and I hope a settlement by arbitration may be speedily reached.