¹ Trendtex Trading Corp. v. Central Bank of Nigeria, [1977] 1 All E.R. 881, 882 (hereinafter Trendtex).

² Ibid., 895.

³ Ibid., 911.

⁴ DeKock, M. H., Central Banking 11 (1961).Google Scholar

⁵ Ibid.

⁶ For example, Sweden’s central bank, the Riksbank, enjoyed the sole right of note issue for a greater part of its earlier life. But after this right was confirmed by legislation in 1809, the latter joint stock banks also assumed the right to issue their own notes. However, in 1897 the note issue monopoly of the Riksbank was restored by legislation, thereby eliminating the notes of the other banks. The legislation of 1897 gave the Riksbank a status comparable with that of the central banks of other countries. The extension of the powers of the national bank marks the emergence of a generally standardized meaning for the term “central bank.” Ibid.

⁷ Ibid., 18.

⁸ Federal Reserve Act, 1, 38 Stat. 251 (1913) (codified as amended at 12 U.S.C., Sec. 226 (1982)).

⁹ Op. cit. supra note 4, at 18.

¹⁰ Plumtre, A. M., Central Banking in the Dominions 159 (1940).Google Scholar

¹¹ Ibid.

¹² Kent, R., Money and Banking 391–92 (5th ed., 1966).Google Scholar

¹³ Op. cit. supra note 4, at 11.

¹⁴ Ibid., 21.

¹⁵ The Agricultural and Industrial Development Banks in most developing countries are examples of these development banks.

¹⁶ Basu, C. B., Central Banking in a Planned Economy 203 (1977)Google Scholar. It was in fulfilment of such objectives that the Central Bank of Nigeria became involved in a myriad of lawsuits. See, e.g., Trendtex, supra note 1.

¹⁷ Cobbold, C. F., Some Thoughts on Central Banking 6 (1962)Google Scholar.

¹⁸ Montagu Norman described the role of the Bank of England in 1926: “I look upon the bank as having the unique right to offer advice and to press such advice even to the point of ‘nagging’; but always of course subject to the supreme authority of the government….” Wilson, J., Banking Policy and Structure: A Comparative Analysis 396(1986).Google Scholar

¹⁹ Bank of England Act, 1946, 9 & 10 Geo. 6, c. 27.

²⁰ Bank of Canada Act, R.S.C. 1985, c. B–2, sec. 1.

²¹ Op. cit. supra note 17, at 6.

²² For example, obligations under irrevocable letters of credit do not end as a result of shifting political affairs. Werner Lehara Int’l, Inc. v. Harris Trust & Sav. Bank, 484 F. Supp. 65 (W.O. Mich., 1980) illustrates some of the potential problems involved in letters of credit transactions. In 1979, the United States government froze Iranian assets held in the U.S. and ceased relations with the government of Iran. Following the U.S. government’s actions, the plaintiffs sought to enjoin the defendants from making payments under a letter of credit pursuant to the request of the Iranian central bank(Bank Markazi Iran).The court rejected the request. Ibid., 75.

This decision places users of letters of credit in jeopardy. Once a foreign central bank is engaged in a letter of credit transaction as account party of the beneficiary and the transaction is characterized as commercial, the funds involved will be deemed funds not held for the central bank’s own account. However, this result defeats the benefit of letters of credit as one of the established ways by which central banks make foreign payments on behalf of either their governments, private individuals, or public corporations.

²³ The use of foreign correspondent banks by central banks is a popular means of facilitating payments for overseas purchases. Correspondent banks are often used in situations in which a central bank, owing to convenience or lack of expertise in the transaction, enlists the services of a bank located in the foreign country. In such cases, funds are transferred to the correspondent bank by the central bank. The correspondent bank then credits the account of the respondent bank, indicating the name of the person for whose benefit the deposit was made. On receiving such information, the respondent bank credits its customer’s account with the amount deposited.

The transfer of funds from a respondent bank to a correspondent bank gives rise to a series of choses in action, as seen in Delbrueck v. Mfrs. Hanover Trust Co., 464 F. Supp. 989 (S.D.N.Y., 1979) aff’d, 609 F. 2d 1047 (2d Cir. 1979), and it is difficult to determine the ownership of the funds. It is arguable that because the funds are held for the central bank in the course of its activities, they belong to the bank. This argument is consistent with the decision in Bradford v. Chase Nat’l Bank, 24 F. Supp. 28, 38 (S.D.N.Y., 1938), where the court stated that “[T]he best, if not the only, way in which the possession of a chose in action—such as a bank account— can be shown, is by showing in whose name the account stands, for the person in whose name the account stands has absolute control of it and that is all possession of a chose in action can mean.” The difficulty of determining the ownership of funds during a transfer complicates the task of distinguishing between public and private acts of a central bank.

²⁴ It is a common practice of central banks to keep their assets in bulk without earmarking specific accounts for particular transactions. In some instances accounts are so earmarked, in which case it is not difficult for the courts to determine the function of the account. However, where the assets are used for both commercial and central bank activities, it is difficult to classify the use to which they are put. In resolving this difficulty, the courts often consider the nature of the transaction. Once there are any trappings of commercial activity, the property will be denied immunity from attachment. See, e.g., Birch Shipping Co. v. Embassy of the United Republic of Tanzania, 507 F. Supp. 311 (D.C. Cir., 1980). In that case, the court held that the checking account of the embassy was not immune from garnishment because the funds therein were used for “commercial purposes.” These commercial purposes were simply the maintenance of the embassy, that is, the purchase of goods and services incidental to its operation. Additionally, the court noted that the immunity granted to central bank property does not extend to property used for mixed purposes, because such an interpretation would enable foreign central banks to switch the use of their property: ibid., 312. Cf. Alcom v. Republic of Colombia, [1983] 3 W.L.R. 906; [1984] 1 All E.R. 1.

²⁵ See, e.g., The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116 (1812); Berizzi Bros. Co. v. S.S. Pesaro, 271 U.S. 562 (1925)•

²⁶ Friedmann, , “Changing Social Arrangements in State-Trading States and Their Effect on International Law,” 24 L. & Contemp. Probs. 350, 351 (1959).CrossRefGoogle Scholar

²⁷ 5 PD 177 (1880); 42 L.T.R. 273 (1874–80).

²⁸ The Parlement Belge, 42 L.T.R. 285 (1880).

³⁰ [1938] 1 All E.R. 719, 741–42.

³⁰ Ibid., 741. The majority of the court held that there should be no immunity for ships owned and operated by foreign states for trading purposes: ibid., 743.

³¹ [1976] 1 All E.R. 78.

³² Ibid., 96.

³³ (1880) 5 P.D. 197. See also The Philippine Admiral, [1976] 1 All E.R. 78, 88.

³⁴ [1938] 1 All E.R. 719, 741.

³⁵ [1977] 1 All E.R. 881.

³⁶ [1981]3W.L.R.328.

³⁷ 17 Int’l. Leg. Mat. 1123 (1978).

³⁸ See Letter from Jack B. Tate, Acting Legal Advisor to the U.S. State Department, to Pearlman, Phillip B., Acting Attorney General (May 19, 1952), reprinted in 26 Dep’t St. Bull. 984–85 (1952) [hereinafter The Tate Letter].Google Scholar

³⁹ See Victory Transp. Inc. v. Comisaria Gen. de Abastecimientos y Transportes, 336 F.2d 354. 363 (2d cir., 1964).

⁴⁰ Republic of Mexico v. Hoffman, 324 U.S. 30, 35 (1945).

⁴¹ 11 U.S. 116(7 Cranch) (1812).

⁴² Ibid., 136.

⁴³ Simmons, , “The Foreign Sovereign Immunities Act of 1976: Giving the Plaintiff His Day in Court,” 46 Fordham L. Rev. 543, 545–46 (1977)Google Scholar.

⁴⁴ For the State Department’s reasons for the adoption of the restrictive immunity approach, see The Tate Letter, supra note 38.

⁴⁵ Flota Maritaima Browning De Cuba S.A. v. Steamship “Canadian Conqueror” et al. and Republic of Cuba, [1962] S.C.R. 997.

⁴⁶ [1944]S.C.R. 275, 277.

⁴⁷ See White v. The Ship “Frank Dale,” [1946] Ex. C. R. 555.

⁴⁸ [1968] Que. R.R 6; (1969) 5 D.L.R. (3d) 128; (1971) 22 D.L.R. (3d) 669.

⁴⁹ [1968] 5 D.L.R.(3d) 128.

⁵⁰ [1971] S.C.R. 997, 1003. In a dissenting judgment, Justice Laskin showed preference for the restrictive immunity approach, basing his argument on the function of governments and the need to protect litigants in claims against foreign sovereigns.

⁵¹ 2 O’Connell, D.P., International Law 872–77 (2d ed., 1970).Google Scholar

⁵² See, e.g., Swiss Israel Trade v. Gov’t of Salta and Banco Provincial De Salta, 1 Lloyd’s Rep. 497 (1972); Ulen and Co. v. Bank Gospodarswa Krajowego, 24 N.Y.S. 2d 201, 206 (1940).

⁵³ See, e.g., Krol v. Bank of Indonesia, 26 I.L.R. 180 (1958) (Court of Appeal of Amsterdam, June 26, 1958).

⁵⁴ See, e.g., Amkor Corp. v. Bank of Korea, 298 F. Supp. 143, 144 (S.D.N.Y., 1969).

⁵⁵ Baccus S.R.L. v. Servicio Nacional del Trigo, [1957] 1 Q.B. 438.

⁵⁶ Mellenger v. New Brunswick Development Corporation, [1971] 1 W.L.R. 604.

⁵⁷ Ibid., 609.

⁵⁸ Swiss Israel Trade Bank v. Government of Salta and Banco Provincial De Salta, 1 Lloyd’s Rep. 497 (1972).

⁵⁹ Ibid., 507.

⁶⁰ Battery S.S. Corp. v. Republic of Vietnam, No. 72–1440, slip op. at 269 (N.D. Cal., 1972); cited in Patrikis, Ernest, “Foreign Central Bank Property: Immunity from Attachment in the United States,” Univ. 111. L. Rev. 265, 269 (1982).Google Scholar

⁶¹ For another case that draws a distinction between commercial and governmental activities, see Krol v. Bank of Indonesia, 26 I.L.R. 180 (1958).

⁶² Trendtex, supra note 1, at 895. The decision turned on the bank’s separate, distinct legal entity. While Lord Denning agreed with this position, he chose to base his decision on the ground that there is no immunity with respect to commercial transactions, even for a government department: ibid.

⁶³ Ibid.

⁶⁴ Ibid., 894.

⁶⁵ See, e.g., Mellenger v. New Brunswick Dev. Corp., [1971] 1 W.L.R. 603, 609; Zavicha Blagojevic v. Banque de Japon, Clunet 101, 842 (1974); Clunet 103, 686 (1976).

⁶⁶ See, e.g., Plesch v. Banque Nat’l de la République d’Haiti, 77 N.Y.S. 2d 43 (Sup. Ct., 1948), 6 A.I.L.C. 92(1972).

⁶⁷ See, e.g., Yessenin-Volpin v. Novosti Press Agency, 443 F. Supp. 849,856 (S.D.N.Y., 1978); Trendtex, supra note 1, at 894 (1977); Mellenger v. New Brunswick Dev. Corp. [1971] 1 W.L.R. 603.

⁶⁸ See generally Harlow, C., “’Public’ and ‘Private’ Law: Definition without a Distinction,” 43 Mod. L. Rev. 241–58 (1980).CrossRefGoogle Scholar

⁶⁹ 46 BVerfGE 342, Dec. 13, 1977; see also Schreuer, “Some Developments in the Law of State Immunity,” 2 Comp. Law Y.B. 215, 232-33 (1978). For a discussion of a case that contrasts with this decision, see the German Federal Constitutional Court’s decision concerning the National Iranian Oil Co., Judgment, Apr. 12, 1983, 22 Int’l. Leg. Mat. 1279 (’9¾)• See also Delaume, , “Economic Development and Sovereign Immunity,” 79 Am. J. Int’l L. 319, 322-23 (1985).CrossRefGoogle Scholar

⁷⁰ See 46 Annuaire de l’Institut de Droit International 301–2 (1954).

⁷¹ 477 F. Supp. 553 (C.D. Cal., 1979). The court had recourse to the United Nations Declaration on Permanent Sovereignty over Natural Resources, 17 UN GAOR 1803, UN Doc. A/5217 (1962); G.A. Res. 3171, 28 UN GAOR Supp. at 30, UN Doc. A/9030 (1973), as evidence that the acts of the Organization of Petroleum Exporting Countries [hereinafter OPEC] countries were sovereign and not commercial. The court did not simply restrict itself to the view that OPEC had a monopoly over the production and pricing of oil for export on the international market and therefore was engaged in a commercial act; rather, it took a broad view of sovereignty.

⁷² Ibid., 567. The case was an anti-trust action against OPEC in which the court held that the production and sale of OPEC member country natural resources were sovereign rather than commercial activities.

⁷³ 28 U.S.C. 1611 (b)(1).

⁷⁴ Patrikis, supra note 60, at 273–74.

⁷⁵ Delaume, G. R., “Sovereign Immunity from Execution and Transnational Loans,” in Bradlow, D. & Sassoon, D. (eds.), Judicial Enforcement of International Debt Obligations 79 (1987).Google Scholar

⁷⁶ See section by section analysis of H.R. 11315 94th Cong. 2d. Sess. (1975). Reproduced in 15 Int’l Leg. Mat. 116 (1976).

⁷⁷ Patrikis, supra note 60.

⁷⁸ 502 F. Supp. 120 (S.D.N.Y., 1980).

⁷⁹ The bank supported its case by furnishing the court with affidavits from both the Nigerian High Commissioner to London and its directors. The court relying on the bank’s structure held that even though the bank was substantially under government control, its status as a distinct entity did not make it a department of the government. Consequently, it was not entitled to immunity.

⁸⁰ Proceedings of the Standing Senate Committee on Legal and Constitutional Affairs, Apr. 9, 1981, at 12:9 (Canada).

⁸¹ 22 Int’l Leg. Mat. 287 (1983).

⁸² See Report of the International Law Commission, Eighth Report on Jurisdictional Immunities of States and Their Property, UN Doc. A/CN.4/396 (1986).

⁸³ See supra note 24.

⁸⁴ Delaume, G., “The State Immunity Act of the U.K.,” 73 Am.J. Int’l L. 185, 188 (1979).CrossRefGoogle Scholar

⁸⁵ Supra note 1, at 895. The decision turned on the bank having a distinct entity. Although Lord Denning agreed with this, he chose to base his decision on the ground that there is no immunity in respect of commercial transactions even for a government department.

⁸⁶ Supra note 24.

⁸⁷ Delaume, supra note 75, at 84.

⁸⁸ Fox, , “Enforcement Jurisdiction, Foreign State Property and Diplomatic Immunity,” 24 Int’l & Comp. L.Q. 115, 122 (1985)CrossRefGoogle Scholar. See also Art. 7b of the Draft Convention of the International Law Association, supra note 81.

⁸⁹ 28 U.S.C. 1605.

⁹⁰ 15 Int’l Leg. Mat. 113 (1976).

⁹¹ Ibid.

⁹² See Fed. R. Civ. P. 69. Attachment in aid of execution is only permitted under the circumstances in section 1610 (a) (1) (5) of the FSIA.

⁹³ It provides in part that: “Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of judgment, and in proceedings in aid of execution shall be in accordance with the practice and procedure of the State in which the district court is held existing at the time. The remedy is sought except that any statute of the United States governs to that extent is applicable”

⁹⁴ The rule states that “A temporary restraining order may be granted… only if (1) it clearly appears from specific facts shown by affidavit… that immediate and irreparable injury, loss or damage will result to the applicant before the adverse party or attorney can be heard in opposition”

⁹⁵ 610 F. 2d 94 (1979).

⁹⁶ No. CA3–79–218–F (N.D. Tex. June 21, 1979).

⁹⁷ No. 80–2791 (D.D.C. Nov. 26, 1980), cited in Patrikis, supra note 60, at 285.

⁹⁸ By the end of 1981 foreign official institutions had about $169.6 trillion worth of U.S. bank liabilities, U.S. government stock obligations, and U.S. corporate stocks and bonds. See 69 Fed. Res. Bull. A. 58 (1982). Also, at about the same time $112.4 billion or 11 per cent of the gross public debt of the U.S. Treasury ws held by foreign institutions. See 68 Fed. Res. Bull. A. 32, and A. 58 (1981). The above statistics underscore the importance of foreign government overseas investments in foreign securities which keep the U.S. economy and the global economy at large buoyant.

⁹⁹ 583 F. Supp. 320 (S.D.N. Y., 1984).

¹⁰⁰ Mr. Β. L. Strayer offered the same interpretation before the Canadian Senate Committee on Legal and Constitutional Affairs. See supra note 80, at 12:5. Both section 11(4) and its interpretation appear to have been modelled on the FSIA. The phrase “held for its own account” is likely to present some difficulties in terms of determining the ownership of the funds. Like the FSIA, the interpretation of the phrase does not help to resolve the problem of ownership of associated funds in an account.

¹⁰¹ [1958] S.C.R. 263, 268; (1958), 13 D.L.R. (2d) 177, 182.

¹⁰² (1980), 103 D.L.R. (3d) 520.

¹⁰³ Re Royal Bank and Corriveau, (1981), 117 D.L.R. (3d) 199.

¹⁰⁴ R.S.C. 1985, c. P-22.

¹⁰⁵ Per Justice Cromarty, supra note log, at 205.

¹⁰⁶ Delaume, supra note 84.

¹⁰⁷ Molot, & Jewett, , “The State Immunity Act of Canada,” 20 Canadian Yearbook of International Law 79, 117 (1982).Google Scholar

¹⁰⁸ Testmony before the Canadian Senate Committee on Legal and Constitutional Affairs. See supra note 80, at 11:10.

¹⁰⁹ Supra note 107, at 117–18.

¹¹⁰ Contrast Banque Campafina v. Banco de Guatemala, 583 F. Supp. 320, 323–25 (S.D.N.Y., 1984) and S&S Machinery Co. v. Masinexport Import, 706 F. 2d 411, 417 (2d Cir., 1983), cert. 104 S. Ct. 161 (1983).

¹¹¹ American Society of International Law, “Draft Convention of Diplomatie Privileges and Immunities,” 26 Am. J. Int’l L., Supp. 455–738 (1932).

¹¹² Ibid., 456–57.

¹¹³ Friedmann, Wolfgang, “Some Impacts of Social Organization on International Law,” 50 Am. J. Int’l L. 457, 481 (1956).CrossRefGoogle Scholar

¹¹⁴ “L’immunité de juridiction des états et des organisations internationales,” 3 Recueil des cours, 1953, Tome 84, at 205, 259–60. O’Connell has also criticized the formulation as “facile and unhelpful": 2 O’Connell, D. P., International Law 846 (2d ed., 1970)Google Scholar.

¹¹⁵ Lauterpacht, , “The Problem of Jurisdictional Immunities of Foreign States,” 28 Brit. Y.B. Int’l L. 220, 224 (1951).Google Scholar

¹¹⁶ Supra note 82.

¹¹⁷ The choice of a bilateral treaty approach over a multilateral convention does not imply that efforts to develop multilateral investment guarantees should be abandoned. Instead the bilateral treaty approach should be used to enhance investment opportunities. Wilson, R., U.S. Commercial Treaties and International Law 239 (1960).Google Scholar

¹¹⁸ Walker, , “Modern Treaties of Friendship, Commerce and Navigation,” 42 Minn. L. Rev. 805, 808(1958).Google Scholar

¹¹⁹ For a compendium of the texts of the international treaties prepared under the auspices of the U.S. Senate, see International Acts, Protocols, and Agreements between the United States of America and Other Powers: 1776–1909 (Malloy, W. ed. 1910).Google Scholar

¹²⁰ Aksen, G. & Landwehr, M. L. (eds.), “The Case for Bilateral Investment Treaties,” in Private Investors Abroad, Problems and Solutions in International Business 367–68(1981).Google Scholar

¹²¹ Ibid., 379.

¹²² See International Chamber of Commerce, Guidelines for International Investment 8 (1974). The popularity of bilateral investment treaties [hereinafter BITs] is demonstrated by the fact that between 1979 and 1980, 24 BITs were negotiated between European states and developing countries. For example, by mid-1985 West Germany had 55 BITs: Stockmayer, , “Bilateral Investment Promotion Protection and Treaties: A Model for Community Promotion of Mining Investment,” 4 J. Energy and Nat. Res. L. 247 (1986)Google Scholar. By 1980, the U.K. had 19 BITs. Similarly, the U.S., France, and Japan have also resorted to BITs as a means of protecting and promoting foreign investments in other countries: ibid., 249.

¹²³ Paterson, R. K., Canadian Regulation of International Trade and Investment 346 (1986)Google Scholar.

¹²⁴ Particular attention must be paid to the wording of the waiver provision. Cf. Birch Shipping Co. v. Embassy of the United Republic of Tanzania, 507 F. Supp. 311 (D.C. Cir., 1980), in which the terms of a waiver provision precluded Tanzania from pleading immunity.

¹²⁵ 502 F. Supp. 120 (S.D.N.Y., 1980).

¹²⁶ Trendtex, supra note 1, at 881.

¹²⁷ See, e.g., the exploration agreement of Apr. 14, 1983 between Liberia and Amoco Liberia Exploration Co., Petroleum Legislation, South and Central Africa, Supp. No. 76, Art. 21 (h): “The Republic of Liberia hereby irrevocably waives any claim to immunity in regard to any proceedings to enforce any arbitral award rendered by a tribunal constituted pursuant to this contract, including, without limitation, immunity from service of process, immunity from jurisdiction of any court, and immunity of such of its property as is of a commercial nature from execution.” Reprinted in Delaume, , “Economic Development and Sovereign Immunity,” 79 Am. J. Int’l L. 319, 344, n.107.CrossRefGoogle Scholar

¹²⁸ Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Mar. 18, 1965, 17 U.S.T. 1270, T.I.A.S. No. 6090.

¹²⁹ A similar provision can be found in the U.S.-Egypt BIT. See Treaty between the United States of America and the Arab Republic of Egypt Concerning the Reciprocal Encouragement and Protection of Investments, Art. 6(2), S. Treaty Doc. No. 99–24, 99th Cong., 2d Sess. 6 (1986).