From the outset the Government of Sepahdar had little chance of success. He had counted on two factors when he had formed it. First, he had hoped the Perso-Soviet talks initiated by Pimia would produce a full-fledged treaty whereby Soviet troops would evacuate the north and cease their assistance to the insurgents in the region. Second, he had counted on Britain to assum e the reorganisation, supervision and funding of the Cossack Division to make it battle-ready to deal with insurgency movements. Sepahdar was frustrated on both counts. The talks in Moscow dragged on longer than anticipated mainly because the Soviets wanted to be certain there would be a prior withdrawal of British troops from northern Iran.
By late December 1920 the Iranian delegation in Moscow was getting nearer to the final draft of a treaty. There was tentative agreement on most issues: abrogation of all existing treaties between Czarist Russia and Iran as well as treaties and agreements between Russia and other countries concerning Iran; cancellation of Iran’s debts to Russia as well as all mortgages, pledges and securities given by Iran; the transfer to Iran of the Russian Bank with all of its immovable properties; the surrender of Russian-built roads and telegraph lines on Iranian soil; surrender of all Russian Government real property except the Legation and Consulate buildings; equal rights of navigation on the Caspian Sea; abolition of extraterritorial rights and privileges (capitulations); the establishm ent of a mixed commission to fix tariffs on goods imported and exported by either country to the other; and consular representation in various provincial cities.
It was remarkable that the draft contained no demand for the abrogation of the 1919 Anglo-Persian Agreement nor any mention of withdrawal of British troops from Iran. The Soviets' only demand was that Iran receive their special envoy, Theodor Rothstein, as the Soviet Minister in Tehran before a treaty was concluded. The question of withdrawal of Soviet troops and an undertaking to desist from giving assistance to Iranian insurgents remained unresolved. The Soviets argued that they had no troops in Iran. In reality Moscow was waiting for British troop withdrawals.
The reorganisation of the Cossack Division by Britain did not take place in the way Sepahdar had hoped. From the outset his colleagues in the Cabinet admonished Sepahdar that to have British officers command the Division was tantam ount to acceptance of the military clause of the Agreement without parliamentary approval, something Pirnia had persistently refused to do. Gen. Ironside, without the express approval of his superiors, in fact somewhat surreptitiously, assigned British officers to reorganise, train and command the division. These initiatives set in motion a series of events which were not anticipated by the Foreign Office and probably not even by Norman.