¹ Morgan Guaranty acted solely as an advising bank; it undertook no independent responsibility for guaranteeing the letter of credit.

² In 1975, Nigeria entered 109 cement contracts with 68 suppliers. For a description of the general background of these events, see Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F. 2d 300, 303-306 (CA2 1981), cert, denied, 454 U. S. 1148 (1982).

³ The parties do not seriously dispute the fact that these unilateral amendments constituted violations of Article 3 of the Uniform Customs and Practice for Documentary Credits (Int'l Chamber of Comm. Brochure No. 222) (1962 Revision), which, by stipulation of the parties, is applicable. See Verlinden B.V. v. Central Bank of Nigeria, 488 F. Supp. 1284,1288 & n.5 (S. D. N. Y. 1980).

⁴ Section 2, 28 U. S. C. § 1330, provides:

“(a) The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as denned in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.”

“(b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title.”

⁵ The District Court dismissed “for lack of personal jurisdiction.” Under the Act, however, both statutory subject matter jurisdiction (otherwise known as “competence“) and personal jurisdiction turn on application of the substantive provisions of the Act. Under § 1330(a), federal district courts are provided subject matter jurisdiction if a foreign state is “not entitled to immunity either under sections 1605-1607 … or under any applicable international agreement;” § 1330(b) provides personal jurisdiction wherever subject matter jurisdiction exists under subsection (a) and service of process has been made under § 1608 of the Act. Thus, if none of the exceptions to sovereign immunity set forth in the Act applies, the District Court lacks both statutory subject matter jurisdiction and personal jurisdiction. The District Court's conclusion that none of the exceptions to the Act applied therefore signified an absence of both competence and personal jurisdiction.

⁶ The foreign diversity clause provides that the judicial power extends “to Controversies… between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.” U. S. Const., Art. Ill, §2, cl. 1.

⁷ The so-called “arising under” clause provides: “The judicial Power [of the United States] shall extend to all Cases … arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.” U. S. Const., Art. Ill, §2, cl. 1.

⁸ After the decision was announced, the United States moved for leave to intervene and for rehearing on the ground that the Court of Appeals had not complied with 28 U. S. C. § 2403, which requires that, in “any action” in which “the constitutionality of any Act of Congress affecting the public interest is drawn in question, the court shall certify such fact to the Attorney General.” The Court of Appeals denied the motion without explanation, see Petition at 55a.

⁹ Letter from Jack B. Tate, Acting Legal Adviser, Department of State, to Acting Attorney General Philip B. Perlman (May 19,1952), reprinted in 26 Dep't of State Bull. 984-985 (1952), and in Alfred Dunhill of London, Inc. v. Cuba, 425 U. S. 682, 711 (1976) (Appendix 2 to opinion of WHITE, J.).

¹⁰ See Testimony of Monroe Leigh, Legal Adviser, Department of State, Hearings on H. R. 11315 before the Subcommittee on Administrative Law and Governmental Relations of the House Committee on the Judiciary, 94th Cong., 2d Sess., 34-35 (1976); Leigh, Sovereign Immunity—The Case of the “Imias”, 68 Am. J. Int'l L. 280 (1974); Note, The Foreign Sovereign Immunities Act of 1976: Giving the Plaintiff His Day in Court, 46 Ford. L. Rev. 543, 548-549 (1977).

¹¹ The Act also contains exceptions for certain actions “in which rights in property taken in violation of international law are in issue,” § 1605(a)(3); actions involving rights in real estate and in inherited and gift property located in the United States, § 1605(a)(4); actions for certain noncommercial torts within the United States, § 1605(a)(5); certain actions involving maritime liens, § 1605(b); and certain counterclaims, § 1607.

¹² Section 1606 somewhat modifies this standard of liability with respect to punitive damages and wrongful death actions.

¹³ [T]o encourage the bringing of actions against foreign states in Federal courts,” H. R. Rep. No. 94-1487, at 13, the Act specifies that federal district courts shall have original jurisdiction “without regard to amount in controversy.” 28 U. S. C. § 1330(a).

¹⁴ In such a situation, the federal court will also lack personal jurisdiction. See n. 5, supra

¹⁵ Section 1605(a)(1), which provides that sovereign immunity shall not apply if waived, may be seen as an exception to the normal pattern of the Act, which generally requires some form of contact with the United States. We need not decide whether, by waiving its immunity, a foreign state could consent to suit based on activities wholly unrelated to the United States. The Act does not appear to affect the traditional doctrine of forum non conveniens. See generally Kane, Suing Foreign Sovereigns: A Procedural Compass, 34 Stanford L. Rev. 385, 411-412 (1982); Note, Suits by Foreigners Against Foreign States in United States Courts: A Selective Expansion of Jurisdiction, 90 Yale L.J. 1861, 1871-1873 (1981).

¹⁶ Prior to passage of The Foreign Sovereign Immunities Act, which Congress clearly intended to govern all actions against foreign sovereigns, state courts on occasion had exercised jurisdiction over suits between foreign plaintiffs and foreign sovereigns, see, e. g., J. Zeevi & Sons v. Grindlays Bank, 37 N. Y. 2d 220, 333 N. E. 2d 168, 371 N. Y. S. 2d 892, cert, denied, 423 U. S. 866 (1975). Congress did not prohibit such actions when it enacted the Foreign Sovereign Immunities Act, but sought to ensure that any action that might be brought against a foreign sovereign in state court could also be brought in or removed to federal court. See supra, at 8.

¹⁷ In view of our conclusion that proper actions by foreign plaintiffs under the Foreign Sovereign Immunities Act are within Article III “arising under” jurisdiction, we need not consider petitioner's alternative argument that the Act is constitutional as an aspect of so-called “protective jurisdiction.” See generally Note, The Theory of Protective Jurisdiction, 57 N.Y.U. L. Rev. 933 (1982).

¹⁸ Since Article HI requires only “minimal diversity,” see State Farm Fire & Casualty Co. v. Tashire, 386 U. S. 523, 530 (1967), diversity jurisdiction would be a sufficient basis for jurisdiction where at least one of the plaintiffs is a citizen of a State.

¹⁹ In enacting the legislation, Congress relied specifically on its powers to prescribe the jurisdiction of Federal courts, Art. I, § 8, cl. 9; to define offenses against the “Law of Nations,” Art. I, § 8, cl. 10; to regulate commerce with foreign nations, Art. I, § 8, cl. 3; and to make all laws necessary and proper to execute the Government's powers, Art. I, § 8, cl. 18.

²⁰ The House Report on the Act states that “sovereign immunity is an affirmative defense that must be specially pleaded,” H. R. Rep. No. 94-1487, at 17. Under the Act, however, subject matter jurisdiction turns on the existence of an exception to foreign sovereign immunity, 28 U. S. C. § 1330(a). Accordingly, even if the foreign state does not enter an appearance to assert an immunity defense, a District Court still must determine that immunity is unavailable under the Act.

²¹ Citing only Shoshone Mining Co. v. Rutter, 177 U. S. 505 (1900), the Court of Appeals recognized that this Court “has implied” that Article III jurisdiction is broader than that under §1331. The court nevertheless placed substantial reliance on decisions construing § 1331.

²² Although a major function of the Act as a whole is to regulate jurisdictionof federal courts over cases involving foreign states, the Act's purpose is to set forth “comprehensive rules governing sovereign immunity.” H. R. Rep. No. 94-1487, at 12. The Act also prescribes procedures for commencing lawsuits against foreign states in federal and state courts and specifies the circumstances under which attachment and execution may be obtained against the property of foreign states. Ibid. In addition, the Act defines “Extent of Liability,” setting out a general rule that the foreign sovereign is “liable in the same manner and to the same extent as a private individual,” subject to certain specified exceptions, 28 U. S. C. § 1606. In view of our resolution of this case, we need not consider petitioner's claim that § 1606 itself renders every claim against a foreign sovereign a federal cause of action. See generally 13 Wright, Miller & Cooper §3563, at 418-419.

²³ In several related cases involving contracts between Nigeria and other cement suppliers, the Court of Appeals held that statutory subject matter jurisdiction existed under the Act. In those cases, the court held that Nigeria's acts were commercial in nature and “causefd] a direct effect in the United States,” within the meaning of § 1330(a)(2) of the Act. Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F. 2d 300, 310-313 (CA2 1981), cert, denied, 454 U. S. 1148 (1982). Each of those actions involved a contract with an American supplier operating within the United States, however. In the present case, the District Court found that exception inapplicable, concluding that the repudiation of the letter of credit “caused no direct, substantial, injurious effect in the United States.” 488 F. Supp., at 1299-1300.