Firman of the Consul Abdul Aziz
Extract from L'Isthme de Suez. Journal de l'Union de deux mers, n°235 15-18 avril 1866

FIRMAN CONCERNING THE SUEZ CANAL.

My illustrious vizier, Ismail Pasha, viceroy of Egypt, having rank of great vizier, awarded the Osmanié and the Medjidieh.

    The building of this great undertaking, which is to provide new facilities to trade and shipping by the piercing of a canal between the Mediterranean and the Red Sea, being one of the most desirable events in terms of science and advancement this century has seen, a series of conferences have for some time been taking place with the Company which seeks to execute this work, and they have just been concluded in a way that is in keeping, both for the present and the future, with the sacred rights of Turkey, as indeed with those of the Egyptian government.

    The contract, the content of whose articles is set out below, has been drawn up and signed by the Egyptian government jointly and severally with the representatives of the Company; it has been subject to our imperial approval, and after having read it, we have given it our acceptance.

    (Hereafter the contract in extenso.)

    The present firman, issued by our imperial divan, is drawn up to this effect that we may give our sovereign authorisation to the execution of the canal by the said company, under the terms stipulated in the contract, as well as in accordance with the regulation of all accessories according to the contract and the acts and conventions set out and designated therein and which form an integral part thereof.

Given 2 zilgydé 1282.
(19 March 1866.)

Convention of 22 February 1866.

Between His Highness Ismail Pasha, viceroy of Egypt, on the one hand;

And the Universal Company of the Suez Ship Canal, represented by Mr Ferdinand de Lesseps, its founding Chairman, vested with this authority by the general assemblies of shareholders of 1 March and 6 August 1864 and by special decision of the Council of Administration of the said Company made on 13 September 1864, on the other hand;

The following has been demonstrated stipulated:

An initial provisional act of concession, dated 30 November 1854, authorised M. de Lesseps to found a financial company with the aim of executing the Suez ship canal.

A second act of concession, dated 5 January 1856, laid down the list of specifications under which the financial company charged with performing the work of building the canal could be established, and gave authorisation to execute the work of piercing the Isthmus once the ratification of the Sublime Porte had been obtained. To this act were appended the statutes of the Universal Company, complete with the approval of the viceroy.

A decree regulation, dated 20 July 1856, laid down the conditions of employment of the workers on the construction of the Suez Canal.

A convention signed between the viceroy and the Company, on 18 March 1863, retroceded to the Egyptian government the first section of the freshwater canal, between Cairo and Ouady.

Another convention, dated 20 March 1863, stipulated the Egyptian government’s financial participation in the enterprise.

A final convention, dated 30 January 1866, settled:

    1° The use of the land reserved for the Company as dependencies for the ship canal;

    2° The cession of freshwater canal, the civil engineering and construction dependent thereon and the resumption of the maintenance of the said canal by the government;

    3° The sale of the Ouady property for 10,000,000 francs;

    4° The dates set for the payment of the sums due to the Company.
    Turkey, having been requested, in compliance with the act of concession of 5 January 1856, to give its ratification to the concession for the canal enterprise, laid down, in a letter dated 6 April 1863, the terms to which this ratification was to be subject.

In order to give full satisfaction in this respect, to Turkey, there has been drawn up between the viceroy and the Company an agreement laid out in the convention of which the clauses and stipulations follow:

Article 1. –

    The regulation dated 20 July 1856 regarding the employment of fellahs on the building of the Suez canal is and remains repealed.

    The provision of article 2 of the act of concession of 5 January 1856, worded as follows: “ In all events, at least four fifths of the workers employed in the work shall be Egyptian.” is therefore declared null and void.

    The Egyptian government shall pay the Company, as compensation and by reason of the cancellation of the regulation of 20 July 1856 and of the advantages which it entailed, the sum of 38,000,000 francs.

    The Company shall procure, by common law, without privileges or hindrance, the workers necessary to carry out the undertaking.

Art. 2. –

    The Company shall renounce the benefit of articles 7 and 8 of the act of concession of 30 November 1854 and of articles 10, 11 and 12 of that of 5 January 1856.

    The extent of the land expected to require irrigation conceded to the Company by these same acts of 1854 and 1856 and retroceded to the government, has been established and set by mutual agreement at 63,000 hectares, from which must be deducted 3,000 hectares which form part of the installations allocated for the purposes of the ship canal.

Art. 3. –

    Articles 7 and 8 of the act of concession of 1854 and articles 10, 11 and 12 of that of 1856 remaining repealed, as stated in article 2, the compensation payable to the Company by the Egyptian government, subsequent to the retrocession of the land, shall amount to 30 million francs, the price per hectare being fixed at 500 francs.

Art. 4. –

    Whereas it is necessary to determine, for the ship canal, the extent of the land required for its establishment and operation, in conditions suitable to ensure the enterprise’s prosperity; whereas the extent shall not be restricted to the space physically occupied by the canal itself, by its freeboards and by the haulage routes; whereas in order to ensure complete and full satisfaction for the canal’s operating requirements, the Company must be able to establish, within proximity of the ship canal, warehouses, shops, workshops, ports in locations where they are of recognised use, and finally lodging suitable for the guards, works supervisors and workmen charged with the maintenance work and for all the representatives of the administration; furthermore, whereas it is fitting to grant, as accessories to the lodgings, land that may be cultivated as gardens and provide some provisions for any resource of this kind in the private premises; and finally whereas it is essential that the Company have sufficient land at its disposal to set up plantations and carry out any work intended to protect the ship canal against the invasion of sand and ensure its preservation; although no provision shall be made for any reason beyond that which is necessary to provide adequately for the divers services set out above; nor shall the Company intend to obtain, for speculative ends, any extent of land, be it to grow crops, be it to erect buildings, be it to re-assign such once the population has expanded;

    The two parties being restricted to the limits to determine, over the entire route of the ship canal, the perimeter of land the use of which, for the duration of the concession, is necessary to build, operate and preserve this canal;

    Are, by mutual consent, agreed that the quantity of land necessary to build, operate and preserve the aforesaid canal, shall be fixed, in accordance with the plans and tables that have been drawn up, approved, signed and appended to this document for that purpose.

Art. 5. –

    The Company retrocedes to the Egyptian government the second section of the freshwater canal situated between Ouady, Ismailia and Suez, in the same way as it has already retroceded the first part of the canal between Cairo and Ouady, by the convention of 18 March 1863.

    The retrocession of the second part of the freshwater canal shall be conducted under the following terms and conditions:

    1° The Company shall be bound to complete the work remaining to give the canal of Ouady, Ismailia and Suez the agreed dimensions and make it ready for reception.

    2° The Egyptian government shall take possession of the freshwater canal, the civil engineering work and the land dependent thereon, as soon as the Company believes it is ready to hand over the said canal in the conditions indicated above. This handing over, that is the reception on the part of the Egyptian government, shall take place in collaboration with the engineers of the government together with those of the Company, and recorded in a report stating in detail those points on which the state of the canal fails to fulfil the conditions with which it was intended to comply;

    3° The Egyptian government shall, from the time of delivery, be responsible for the maintenance of the said canal, that is:

      I. – To carry out as and when required all plantation, crop and defence works necessary to prevent the deterioration of the banks and the invasion of sand, and to maintain the supply of the canal by that of Zagazig, until such time as this supply can be provided directly from Cairo;

      II. – To execute the work for the section that has been retroceded to it by the convention of 18 March 1863 and to bring the first and second sections into communication with one another at the Ouady junction point.

      III. – To ensure navigation in the canal throughout all seasons by maintaining a water level of 2.5 metres in the high waters of the Nile, 2 metres at the medium low water point and no less than 1 metre at the very lowest water point:

      IV. – To provide, furthermore, to the Company, a volume of 70,000 cubic metres of water per day for the supply of the populations along the route of the ship canal, the watering of gardens, the operation of machines designed for the maintenance of the ship canal and of those of the industrial installations linked to its operation; the irrigation of crops and of the plantations grown on the dunes and other land not naturally irrigable contained in the dependencies of the ship canal; and finally the supply of vessels passing through the said canal;

      V. – To undertake any cleaning out and work necessary to maintain the freshwater canal and its structures in perfect working order. The Egyptian government shall accordingly substitute the Company in all duties and obligations which inadequate maintenance would incur for the latter, taking account of the condition in which the canal was handed over, and of the period of time necessary to carry out the work which this condition may have required.

Art. 6. –

    The Company shall have right of way on the land crossed by the water channels and conduits necessary for taking the aforementioned 70,000 cubic metres of water.

Art. 7. –

    As soon as the delivery of the freshwater canal is completed, the government shall have the use thereof and dispose of the faculty to establish there water supply points; the Company, for its part, shall for the duration of the work of building the ship canal, and if necessary, until the end of 1869, have the faculty to establish on the freshwater canal screw-propeller haulage and tug services for its own transport requirements and those of its operators and the exclusive operation of goods transit from Port Said to Suez, and vice versa.

    From 1869 onwards, the Company shall be once again governed by the provisions of common law for the use of the freshwater canal; it shall be granted no further usage of the freshwater canal other than that belonging to Egyptian subjects, and its ships and vessels shall be granted no right of navigation.

    The supply of freshwater directly at Port Said shall continue to be provided by the means that the Company sees fit to employ at its own cost.

    8° The Company shall cease to have the rights of cession over water, navigation, piloting, towing, hauling or mooring granted to it on the freshwater canal under the terms of articles 8 and 17 of the act of cession of 5 January 1856.

    The vessels built by the Company for its services on the freshwater canal from Zagazig to Suez shall be ceded to the Egyptian government at cost price; those of its vessels and dependencies which are required by the Company during the above-mentioned period shall be leased by the government at a rate of 5 % a year of the repaid capital.

    The freshwater canal having been fully retroceded to the Egyptian government, its maintenance being the responsibility of the said government, it may establish on the said canal and its dependencies any fixed or mobile installations it shall deem suitable; however it serves no purpose to determine, as was calculated in the case of the ship canal, the extent of land required for its maintenance and preservation.

Art. 8. –

    The total compensation payable to the Company, which amounts to 84,000,000 francs, shall be paid by the Egyptian government, together with the amount of government shares in the event that the Company makes an appeal for funds this present year, and the 10,000,000 francs, sale price of Ouady, in the manner indicated in the table drawn up to this effect, signed and hereto appended.

Art. 9. –

    The ship canal and all its dependencies shall remain subject to the Egyptian police, who shall be free to act as on any other point on the territory, in such a way as to ensure order, public safety and the enforcement of the country’s laws and regulations.

    The Egyptian government shall enjoy right of way through the ship canal on those points which it deems necessary, both for its own communication purposes and for the free movement of trade and the public, on the understanding that the Company shall not be able to receive any toll or other charge under whatever pretext.

Art. 10. –

    The Egyptian government shall occupy the perimeter of the land reserved as a dependency of the ship canal, and any position or point which it considers necessary for the defence of the country. This occupation shall not act as a hindrance to shipping and must conform to the rights of way allocated to the canal’s freeboards.

Art. 11. –

    The Egyptian government, under the same reserves, may occupy for its administrative services (post, customs, barracks, etc.), any location it shall judge necessary, taking account of the Company’s operating requirements; in this event, the government shall repay to the Company, when so required, any expenses the latter may have incurred to create and appropriate the land of which it wishes to have the use.

Art. 12. –

    In the interests of trade, industry and the prosperous operation of the canal, any private individual shall have the faculty, pending the prior authorisation of the government and providing he is in accordance with the administrative or municipal regulations of the local authority, as well as with the laws, practices and taxes of the country, to establish business, be it along the ship canal, or in the towns erected along its route, except for the freeboards, banks and haulage ways: the latter must remain open to free movement, in compliance with the regulations governing its usage.

    These locations, moreover, may be situated only on those sites recognised by the Company’s engineers as not being necessary for the operating services, the beneficiaries being charged with the reimbursement to the Company of any expenses incurred by the latter in creating and appropriating the said sites.

Art. 13. –

    It shall be understood that the establishment of the customs services must not in any way undermine the customs franchises enjoyed by the general transit carried out through the canal by ships of all nations without distinction, exclusion or preference of individual or nationality.

Art. 14. –

    The Egyptian government, in order to ensure that the mutual conventions between itself and the Company are adhered to faithfully, shall have the right to employ at its own expense, with regard to the Company and the cooperation in the work, a special commissioner.

Art. 15. –

    It is hereby declared, provisionally, that at the expiration of the ninety-nine years of the concession of the Suez Canal and failing any further agreement between the Egyptian government and the Company, the concession shall come to an end.

Art. 16. –

    The Universal Company of the Suez ship canal being Egyptian, it shall be governed by the laws and practices of that country; however, as far as its status as a company and the relationship between the associates are concerned, it shall, by special agreement, be governed by the legislation which governs joint-stock companies in France. It is agreed that any disputes arising out of this provision, shall be settled in France by arbitrators with appeal to the Imperial Court of Paris.

    Disputes in Egyptian between the Company and private individuals, irrespective of their nationality, shall be settled by local tribunals in accordance with the form of the law and practices of the country and treaties.

    Disagreements arising between the Egyptian government and the Company shall also be judged in local tribunals and settled in accordance with the laws of the country.

    Representatives, workers and other persons belonging to the administration of the Company, shall be judged by the local courts, in accordance with the local laws and treaties, for all instances of misconduct or disputes in which both or either one of the parties is indigenous.

    Where both parties are foreign, the procedure followed shall be that stipulated by the regulations in force.

    Any notification to the Company by any interested party whatsoever in Egypt shall be valid once submitted to the administration’s headquarters in Alexandria.

Art. 17. –

    Any previous acts, concessions, conventions and statutes are maintained in all their provisions provided they do not contradict the present convention.

    Drawn up in duplicate in Cairo on the twenty-second of February eighteen hundred and sixty-six.

Signed: ISMAIL.
Signed: FERDINAND DE LESSEPS.