1013110 BRITISH RESIDENCY, BAHRAIN March 9, 1960. Please refer to your letter 10111 of March 2 about the enployment of Indians in the Development Department of the Sultanate Government. 2. Before we can consider making an approach to the Indian Government as suggested in paragraph 9 of your letter I think we must be certain that the Development Department will be able to honour contracts with Indians "more than the Muscat authorities have done". We do not know here on whose behall Indians are engaged for the Development Department; does Boustead engage them on his own authority as Development Secretary or on behalf of the Sultanate Government or on behalf of the Sultan? But whatever the actual form of words it appears to me that such Indians are really the ergployees of the Sultan; if he instructed. Boustead to dismiss one of his Indian assistants, Boustead would surely have to comply. The Sultan would refuse to admit that he must accept the arbitration of the Indian Consul General in any dispute over a contract between himself and an Indian employee of the Development Department; and would probably instruct Boustead not to accept your Indian colleagues arbitration 11 the contract was between Boustead, as the Sultans Development Secretary, and an Indian. We cannot, therefore, guarantee to the Indian Government that the Development Department would respect contracts since the Department is a Muscat authority subject to the Sultan. 3. It seems to me, in any case, urealistic to expect an independent government, as employer, in any dispute over a contract with a foreign employee, to submit itself to the arbitration of the consular representative of the employee. If this argument is tenable, and I think it must be, we cannot expect the Sultan or his Government or e department of that Government to enter into contracts with Indians in the forms prescribed by the Indian Protection of Inmigrants. It would appear, therefore, necessary for the Sultanate Government to agree with the Indian Government a form of contract for Indians in its employ which protects the rights of the employer and the employee but which does not subject the Sultanate Government to any unacceptable arbitration procedures. This is what Her Majesty's Goverament in the United Kingdom have done to cover the eraployment of Indians at the Political Residency and Political Agencies in the Gull; I enclose, for ease of reference, a copy of the letter of appointment for India-based staff. L. I should be grateful if you would discuss the arguments in this letter with Boustead and consider whether there trould not be value in raising the matter with the Sultan to diseaser 12 he would agree to Boustead's negotiating with your Indian colleague a special letter of appointment, acceptable to the Indian and Sultanate Governments, for Indian eraployees of the Development Department. The Sultan might accept an approach designed to protect his interests and dignity. W.N. Monteith, Esq., British Consulate General,
