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The Principle of Sovereign Immunity and International Contracts. Recent Developments in English Case-Law and American Legislation

Published online by Cambridge University Press:  21 May 2009

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In the past year, the discussions concerning the theories of immunity have received a fair amount of attention both in the United States as well as in England. The general problem again became of interest in the USA at the time when the Foreign Sovereign Immunities Act 1976 came into force on 10 January 1977, the enactment being the result of ten years of legislative work. This piece of legislation, which is important for international contract law, has adopted the principles of the relative immunity theory, after they had already been recognized in 1953 by the “Tate Letter” (see note 23) and were applied shortly thereafter by the Supreme Court. The purpose of the new legislation, which will also have important consequences in respect of the question concerning the immunity from execution, is to bring the problem of immunity, which has until now been governed by international law, within the scope of national law and practice.

Copyright © T.M.C. Asser Press 1978

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1. The Philippine Admiral (1976) 2 WLR 214Google Scholar; (1976) 1 All ER 78, PC.

2. The Porto Alexandra (1920) P. 30, CA.Google Scholar

3. For a summary of the legal position in various countries, see Schmitthoff, Clive M. (1973) 22 ICLQ pp. 262265.Google Scholar

4. Kahan v. Pakistan Federation (1951) 2 KB 1003, CA.Google Scholar

5. Duff Development Co. Ltd. v. Government of Kelantan (1924) AC 797, PC.Google Scholar

6. Baccus S.R.L. v. Servicion National del Trigo (1957) 1 QB 438; (1956) 3 WLR 948.Google Scholar

7. Kahan v. Pakistan Federation, and even earlier in Duff Development Co. Ltd. v. Government of Kelantan.

8. Thai-Europe Tapioca Service Ltd. v. Government of Pakistan, Directorate of Agricultural Supplies (1975) 3 All ER 961, 966, CA.Google Scholar, “Usually the contract contains an arbitration clause, in which case, of course, there is a voluntary submission to the jurisdiction of the arbitration and the supervision of them by the courts”.

9. Petrol Shipping Corp. v. Greece, 360 F. 2d 103 (1963)Google Scholar cited by Markesinis, B.S. in The Cambridge Law Journal, 11 1976 p. 200.Google Scholar

10. Thus Prof. A. de Lapradelle declared in 1952: “L'égalité souveraine des Etats, indépendants membres de la société internationale, ne leur permet de venir ni en demande ni en défence devant les tribunaux d'un autre Etat”. (Meeting of the Institute of International Law at Siena, 1952 p. 106).

11. Art. 1 of this treaty provides that: “See-going ships owned or operated by states, cargoes owned by them, and cargoes and passengers carried on state-owned ships, as well as the states which own or operate such ships and own such cargoes shall be subject, as regards claims in respect of the operation of such ships or in respect of the carriage of such cargoes, to the same rules of liability and the same obligation as those applicable in the case of privately owned ships, cargoes and equipment”.

12. Council of Europe, Strasbourg May 1972, European Treaty Series No. 74: Discussed by W.G. Belinfante in Mededelingen van de Ned. Ver. voor Internat. Recht No. 67 (1973), summarized in NTIR (1973) 297 et seq.Google Scholar

13. Compania Naviera Vascongada v. S.S. Christina (1938) AC 485, 490.Google Scholar

14. Cf., Baccus S.R.L. v. Servicio Nacional del Trigo (1957) 1 QB 438Google Scholar; (1956) 3 WLR 948 and the recent case Trentex Trading Corp. v. Central Bank of Nigeria (1976) 1 WLR 868.Google Scholar

15. Cf., Cheshire pp. 106108.Google Scholar

16. (1967) 1 AC 853; (1966) 2 All ER 536.

17. (1957) 3 WLR 884, 910.

18. However, it is difficult to distinguish between the two, see Oppenheim, , International Law, vol. I, 8th ed. (1955) p. 274Google Scholar, n. 2 for a number of borderline cases. The nature of the act is also applied as criteria by Lord Denning in Thai Europe Tapioca Service Ltd. v. Government of Pakistan, Directorate of Agricultural Supplies (1975) 1 WLR 1485, 1492Google Scholar, “… sovereign immunity should not depend on whether a foreign government is impleaded, directly or indirectly, but rather on the nature of the dispute …”.

19. Schmitthoff, Clive M., loc. cit.p. 456.Google Scholar

20. The Schooner Exchange (1812) 7 Cranch 116Google Scholar; The Pesaro (1926) 271 US 562Google Scholar; The Navemar (1938) 303 US 68.Google Scholar

21. (1945) 324 US 30, 35.

22. Cf., The House of Representatives Report No. 94–1487 on “Jurisdiction of United States Courts in Suits against Foreign States”, published in International Legal Materials, (ILM) vol. XV, No. 6 (11 1976) p. 1402.Google Scholar

23. Published completely in The Department of State-bulletin, vol. XXVI, No. 678 pp. 984985, 06 23, 1952.Google Scholar

24. (1961) 197 F. Supp. 710.

25. Republic of China et al. v. National City Bank of New York (1955) 348 US 356.Google Scholar

26. Report No. 94–1487, ILM, loc. cit, p. 1402.Google Scholar

27. See the letter of 2 November 1976 from Monroe Leigh, Legal Advisor to The State Department, to the Attorney-General regarding the “Policy on how to treat questions”, published in ILM, loc. cit., p. 1437.Google Scholar

28. 28 USC 1605.

29. 28 USC 1610, 1611; see also Report No. 94–1486, ILM., loc. cit., p. 1413.Google Scholar

30. 28 USC 1330; Report No. 94–1487, ILM., loc. cit., p. 1402.Google Scholar

31. The Parlement Beige (1879) 4 PD 129Google Scholar; (1880) 5 PD 197 CA.

32. At first instance Sir Robert Philimore rejected the claim on the same grounds as those laid down by him earlier in The Charkierh (1873) LR 4 A&E 59Google Scholar; (1873) LR 8 QB 197.

33. Compania Naviera Vascongada v. S.S. Christina (1938) AC 485Google Scholar; (1938) 1 All ER 719, HL.

34. 2 WLR 224, 225.

35. Cf., Walker, R.J. and Walker, M.G. in The English Legal System, 3rd ed. 1972 p. 127.Google Scholar

36. According to Markesinis, B.S. in CLJ (1976), vol. 35 p. 202.Google Scholar