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Nationalization of Suez Canal Company
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ÃáßÜÜÇãÜáÜÉ
SUEZ CANAL COMPANY NATIONALISATION LAW, JULY 26th, 1956
In the Name of the Nation, The President of the Republic, Considering.
Firmans dated November 30th, 1854, and January 5th, 1856, relative to the concession for the working of the Suez Canal waterway and the establishment of an Egyptian limited company to operate it,
Law No. 129 of 1947, relative to monopoly of public utility enterprises,
Law No. 317 of 1952, relative to unilateral contract,
Law No. 26 of 1954, relative to private companies, joint stock companies and limited liabilities companies, and
The opinion of the State Council,
Decree as follows:
ARTICLE I
The Suez Maritime Canal Company, S.A.E. is nationalised. All money, rights and obligations of the company are transferred to the State. All organisations and committees now operating the company are dissolved.
Shareholders and holders of constituent shares shall be compensated in accordance with the value of the shares on the Paris Stock Market on the day preceding the enforcement of this law.
Payment of compensation shall take place immediately the State receives all the assets and property of the nationalised company.
Done at Cairo, this nineteenth day of October, 1954, in duplicate, in the English and Arahi( languages, both texts being egualh authentic.
ARTICLE II
The management of the Suez Canal traffic utility will be in the hands of an independent body enjoying juristic personality and attached to the Ministry of Commerce. The formation of said body
* * *Include 50,000 tons of ammunition, 300,000 tons of ordnance and engineering equipment, 2,000 vehicles, 30 locomotives, 100 railway wagons, 80,000 tons of air and ground fuels, 1,300,000 jerricans as petrol and watr; containers, etc.
* Egypt, Ministry for Foreign Affairs, White Paper on the Nationalisation of the Suez Maritime Cana! Company (Government Press, Cairo, 1956).
APPENDIX G
and the amount of compensation to be paid to its members sha ll be determined by order of the President of the Republic. The bod v will'be invested with all the powers necessary for the proper manage ment of the utility.
Without prejudice to the control of the Audit Department ovci the balance sheet, said body shall have an independent budget whose preparation shall be in accordance with commercial prin
ciples. The budget shall commence on July 1 st and end on June 30t I I of every year. The budget and balance sheet shall be sanctioned h% a decree of the President of the Republic. The first budget shall commence on the date this law comes into operation and end on June 30th, 1957.
Said board can delegate one or more of its members to executc its decisions or perform any duty assigned to him.
It is also permissible to form from among its members the technical committees to help carry out research work as well a, undertake the study of major issues.
Said board shall be represented before the courts, the government and other authorities by its Chairman.
ARTICLE III
The money and property of the nationalised company in Egypt and abroad are frozen. Banks, organisations and individuals arc prohibited from disposing of same in any manner except by order of board mentioned in Article II.
ARTICLE IV
Said board shall retain all the employees and workers of the nationalised company. They will continue performing their duties and none can leave his work or give it up in any manner or for any reason except with the permission of the Authority mentioned in Article III.
ARTICLE V
Any contravention of Article III is punishable with imprisonment and a fine equal to three times the value of the money in question. Every contravention of Article IV shall be punishable with imprisonment in addition to denying the person concerned any right to compensation, pension or end of service gratuity.
APPENDIX G
ARTICLE VI
This decree shall be published in the Official Gazette, and will have the force of law from the day it is published. The Minister of Commerce is empowered to issue the necessary executory orders.
This decree shall bear the seal of the State and be executed as one of its laws.
APPENDIX F
Nasser Nationalizes the Suez
Canal 1956, a Summary
From the Bibliography.
written by Mostyn, Trevor Ed. Cambridge Encyclopedia of the Middle East and
North Africa. Cambridge University Press, 1988, 282. Goff, Richard. The
Twentieth Century: A Brief Global History. McGraw-Hill Inc, 1994. Encyclopedia
Americana. "The Suez Canal". Grolier Inc., 1988, 845-846. Edited by: Chad E.
Anderson, canderso@northpark.edu Researched by: Kristin Kreger,
kkreger@northpark.edu Written by: Kristian A. Werling, kwerlin@northpark.edu
May 5, 1997
http://www.campus.northpark.edu/history/WebChron/MiddleEast/SuezNat.html
quote "...
The 50's and 60's were the
height of the Cold War between the two polarized powers of the world. Many
countries of the world were able to use the Cold War to their advantage by
receiving competing assistance from both sides in the war. Egypt was no
different than these many other underdeveloped nations in that it wanted to
use the Cold War to its advantage as well. Egypt was being led by Nasser who
announced an aggressive development program in 1952 for which he was lobbying
for funds from around the world. He started by raising funds mainly through
the UN, World Bank and the Western Democratic nations but soon sought the
assistance of Communist nations. When an arms deal with Czechoslovakia went
through, US Secretary of State John Dulles announced withdrawal of US funds
and assistance for Nasser's development program. In response to the harsh
treatment of Egypt by the United States, Nasser nationalized the Suez Canal on
July 26, 1956. The nationalization of the canal took the world by surprise,
especially the British and French stockholders who owned the Suez Canal
Company. Although Nasser promised that the company would be compensated for
its loss, Britain, France, and Israel began plotting to take back the canal
and overthrow Nasser as well. Britain, France and Israel united in secret in
what was to become known as the tripartite collusion, something that they
denied publicly for many years. Israel opted to participate in the plans
against Egypt in order to gain favor in the sight of western nations because
the small developing nation was in constant fear of being overrun by Arab
nations. Arrangements were made for Israel to make the initial invasion of
Egypt and overtake one side of the Suez Canal. The British and French
attempted to follow the Israeli invasion with diplomacy, but they were
unsuccessful, so they were forced to send in troops to occupy the canal.
However, the action on the part of the tripartite collusion was not viewed in
favor by the US or the Soviet Union since their intervention signified their
predominance in the area. The troops were withdrawn from the Canal Zone in
December under the direction of the United Nations. The canal was returned to
Egypt's possession and reparations were paid by Egypt under the supervision of
the World Bank. Overall the actions of the tripartite collusion were not at
all beneficial to the democratic plight in the Cold War because they drew
Nasser and Egypt into further relations with the USSR. The fight over the
canal also laid the groundwork for the Six Day War in 1967 due to a lack of a
peace settlement following the 1956 war. ...unquote "
The Other Side of the Coin
Gamal Abdel Nasser
Decree of the President of the Republic of Egypt
on the Nationalization of the Suez Canal Company,
Cairo, July 26, 1956.
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President of the Republic Order Concerning the issuance of Law No. 285 of 1956 on the Nationalization of the Universal Company of the Suez Maritime Canal.
In the Name of the Nation
The President of the Republic,
Considering the two firmans issued on November 30, 1854 and January 5, 1856 (respectively) concerning the preferential rights relating to the administration of the Suez Canal Transit Service and the establishment of an Egyptian joint-stock company to operate it;
and Law No. 129 of 1947 concerning public utility concessions;
and Law No. 317 of 1952 concerning individual labor contracts;
and Law No. 26 of 1954 concerning joint-stock companies, limited partnerships by shares and limited liability companies;
with the advice of the State Council;
has issued the following law;
Article I
The Universal Company of the Suez Maritime Canal (Egyptian joint-stock company) is hereby nationalized. All its assets, rights and obligations are transferred to the Nation and all the organizations and committees that now operate its management are hereby dissolved.
Stockholders and holders of founders shares shall be compensated for the ordinary or founders shares they own in accordance with the value of the shares shown in the closing quotations of the Paris Stock Exchange on the day preceding the effective date of the present law.
The payment of said indemnity shall be effected after the Nation has taken delivery of all the assets and properties of the nationalized company.
Article II
An independent organization endowed with juristic personality and annexed to the Ministry of Commerce, shall take over the management of the Suez Canal Transit Service. The composition of the organization and the remuneration of its members shall be fixed in an order of the President of the Republic. In so far as managing the Transit Service is concerned the organization shall have all the necessary powers required for the purpose without being restricted by Government regulations and procedures.
Without prejudice to the auditing of its final accounts by the State Audit Department, the organization shall have an independent budget prepared in accordance with the rules in force for commercial concerns. Its financial year shall begin on July 1 and end on June 30 each year. The budget and final accounts shall be approved by an order of the President of the Republic. The first financial year shall begin on the effective date of the present law and end with June 30, 1957.
The organization may delegate one or several of its members to implement its decisions or to discharge any duty assigned to these members.
It may also set up from among its own members or from among other people, a technical committee to assist it in its own research work and studies.
The chairman of the organization shall represent it before the courts, government agencies, and other places, and in its dealings with third parties.
Article III
The assets and rights of the nationalized company in the Republic of Egypt and abroad, are hereby frozen. Without specific permission obtained in advance from the organization provided for in Article II above, banks, organizations and private persons are hereby prohibited from disposing of those assets or making any payment requested them or due by them.
Article IV
The organization shall retain all the present officials, employees and laborers of the nationalized company at their posts; they shall have to continue with the discharge of their duties; no one will be allowed to leave his work or vacate his post in any manner and for any reason whatsoever except with the permission of the organization provided for in Article II above.
Article V
All violations of the provisions of Article III above shall be punished by imprisonment and a fine equal to three times the value of the amount involved in the offense. All violations of the provisions of Article IV shall be punished by imprisonment in addition to the forfeiture by the offender of all rights to compensation, pension or indemnity.
Article VI
The present order shall be published in the Official Gazette and shall have the force of law. It shall come into force on the date of its publication. The Minister of Commerce shall issue the necessary administrative orders for its implementation.
It shall bear the Seal of the State and be implemented as one of the State laws.
Given this 18th day of Zull Heggah, 1375 A.H. [July 26, 1956]
Gamal Abdel Nasser
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