The Dutch Republic has been at war…

The Dutch Republic has been at war with the Spanish crown (to which Portugal has belonged since its annexation in 1580) from its inception.

As the king of Spain had embargoed Dutch trade with Portugal from 1598, the Dutch had sought for spices themselves in the areas apportioned to Portugal under the Treaty of Tordesillas.

This had put them into conflict with the Portuguese empire.

Steven van der Hagen, admiral of the Dutch East India Company (VOC), had in February 160 conquered the Portuguese fortress of Victoria at Amboyna, thereby taking over the Portuguese trading interests at that place.

Like other European traders they have tried to obtain a local monopsony in the spice trade, if need be keeping out the factors of other European countries by force of arms.

This has caused a lot of strife with other East-India companies, especially the English one.

Unavoidably, the national governments have become involved, and this threatens to poison the good relations between James I of England and the Dutch States-General.

These parties therefore cause the two warring companies to conclude a Treaty of Defense in London in 1619.

According to this Treaty, the companies will henceforth cooperate in the East Indies.

The market in spices is divided between them in a fixed proportion of two to one (both companies having legal monopolies in their home markets); a Council of Defense is instituted in Batavia that is supposed to govern the merchants of both companies; most importantly, those merchants are now supposed to share trading posts peacefully, though each company is to retain and police the posts it had occupied previously.

The Dutch interpret this latter provision so as to mean that each company has legal jurisdiction over the employees of both companies in the places it administers.

The English, on the contrary, maintain on the basis of the arbitration-article 30 of the treaty that only the Council of Defense is to have jurisdiction over employees of the "other" company.

This will prove to be an important difference of opinion in the ensuing events.