State Papers: Mayo man demands State help to secure IR£8m for Czarist bonds

A Mayo businessman threatened to take out injunctions to stop commercial relations between Ireland and the Soviet Union, including the possible sale of the Verolme shipyard in Cork, if the government did not support his claim. Picture: Denis Scannell

The Government was asked to put pressure on the Soviet Union in 1989 by a Mayo businessman who was trying to redeem IR£8m held in bonds that had been issued by the Czarist government during World War I.

State files released under the 30-year rule show Eamon McEnery from Ballycroy, Co Mayo, threatened to take out injunctions to stop commercial relations between Ireland and the Soviet Union, including the possible sale of the Verolme shipyard in Cork, if the government did not support his claim.

He requested help from minister for foreign affairs Brian Lenihan in February 1989 to obtain monies which he claimed was owed to him from the Soviet government on foot of bonds that had been issued during World War I by the government of Czar Nicholas II.

However, he warned: “If you can’t get any money for me surely I’ll have a case against your administration for ignoring the rights of an Irish citizen by trading with someone who claims the right not to meet contractual obligations when it suits them.” 

Officials who examined Mr McEnery’s claim said the Soviet government had never accepted responsibility for Czarist bonds.

The Department of Foreign Affairs replied that, after looking at the issue, Mr Lenihan was not satisfied the matter was one which he would be prepared to pursue with the Soviet authorities. A memo prepared for senior officials in the Department of Foreign Affairs by a legal adviser had stressed the need to establish a sound legal basis on which to pursue the claim.

If a statable case based on sound legal arguments was produced, the memo said it would at least be open to the minister to consider taking the matter to the Soviet authorities if they refused to acknowledge the claim or refuse to have it dealt with by appropriate legal procedures.

However, if no case was made, as in Mr McEnery’s situation, the memo said the approach to the Soviets could only be made on an “ad misericordiam” (an appeal to pity) basis, which it said was unlikely to produce results “even if pursued at political level". 

It said it would be unwise for the department to imply in correspondence with Mr McEnery that it might reconsider taking up the matter at political level if there was a sound basis for a legal case.

The memo said it would only encourage the businessman to engage in lengthy correspondence based on “general assertations which he has been making to date” which would result in officials having to engage in “time-consuming work to virtually no purpose". It recommended that Mr McEnery should be advised that the department had nothing to add to its previous correspondence on the subject.

Mr McEnery insisted in several letters to the department that he was not interested in pursuing his claim through legal channels but was seeking political action.

One official noted that Mr McEnery had a point when he asserted that governments cannot legally repudiate State loans under international law.

However, the official added that the Soviet Union’s repudiation of Czarist bonds was a “political reality and fact that can’t be ignored”. 

Officials had noted newspaper cuttings which showed the Soviet government at the time had started negotiating with the US for the first time in over 70 years on a repayment of $192m in Czarist loans to US bondholders as part of a bid to encourage US banks to extend longer-term loans to the Soviet Union.