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Part 1 The subjects of international law, Ch.3 Position of the states in international law, Equality of States in International Law

Sir Robert Jennings qc, Sir Arthur Watts kcmg qc

From: Oppenheim's International Law: Volume 1 Peace (9th Edition)

Edited By: Sir Robert Jennings QC, Arthur Watts KCMG QC

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved. Subscriber: null; date: 10 December 2022

Subject(s):
States, equality — Act of state doctrine — Jurisdiction of states, extra-territorial — Immunity from jurisdiction, states — Immunity from jurisdiction, waiver — Diplomatic relations

Equality of States in International Law

Harv Research (1932), pp 475–736 (a valuable treatise on the jurisdictional immunities of foreign states) Lawrence, Essays, pp 191–213 Nelson, Die Rechtswissenschaft ohne Recht (1917), pp 96–106 Dickinson, The Equality of States in International Law (1920) Rapisardi-Mirabelli, Il principio dell’ uguaglianza giuridica degli Stati (1920) Goebel, The Equality of States (1923) Dupuis, Le Droit des gens et les rapports des grandes puissances avec les autres états avant le pacte de la Société des Nations (1921), pp 13–167 and 421–529 Korte, Grundfragen der völkerrechtlichen Rechtsfähigkeit und Handlungsfähigkeit der Staaten (1934) Weiss, Hag R (1923), pp 525–51 Armstrong, AJ, 14 (1920), pp 540–64 Charles de Visscher, RI, 3rd series, 3 (1922), pp 149–70, 300–35 Praag, ibid, 4 (1923), pp 436–54 Baker, BY (1923–24), pp 1–20 McNair, Mich Law Rev, 26 (1927), pp 131–52 Rappard, Problems of Peace (vol ix, 1934), pp 14–53 Fischer Williams, BY, 13 (1932), pp 35–7 Scott, Hag R, 42 (1932), iv, pp 566–83 Schindler, ibid, 46 (1933), iv, pp 260–70 Strupp, ibid, 47 (1934), i, pp 508–13 Bilfinger, ZöV, 4 (1934), pp 481–97 Myers, AJ, 31 (1937), pp 437–48 Kelsen, Yale LJ, 53 (1944), pp 207–20 King, AJ, 42 (1948), pp 811–32 Weinschel, AJ, 45 (1951), pp 417–42 Ch de Visscher, Hag R, 86 (1954), ii, pp 455–70 van Bogaert, RG, 59 (1955), pp 85–98 Korowicz, Hag R, 102 (1961), i, pp 34–62 Schaumann, Die Gleichheit der Staaten (1967) Anand in International Studies, 8 (1967), pp 213–41, 386–421, and Hag R, 197 (1986), ii, pp 9–228 Vitgal, The Inequality of States (1967) Friedman in The Relevance of International Law (eds Deutsch and Hoffman, 1968) Klein, Sovereign Equality among States (1974) Levi, YB of World Affairs (1978), pp 286–302 Lachs, Hag R, 169 (1980), iv, pp 77–84 Pechota in The Structure and Process of International Law (eds MacDonald and Johnston, 1983), pp 453–84 See also the literature quoted at § 109, n 2 on jurisdictional immunities of foreign states.

§ 107  Equality an inference from the basis of international law

Since international law is based on the common consent of states as sovereign communities, the member states of the international community are equal to each other as subjects of international law. States are by their nature certainly not equal as regards power, territory and the like. But as members of the community of nations they are, in principle, equal, whatever differences between them may otherwise exist. This is a consequence of their sovereignty in the international sphere. Although the abstract principle of state equality is open to certain (p. 340) objections when pressed to extremes,1 and although it is sometimes departed from in circumstances which require account to be taken of undeniable inequalities in political and economic power (eg as with the permanent membership of certain major states in the Security Council and their so-called power of veto over certain decisions of the Council,2 even though the Charter of the United Nations is professedly based on the principle of ‘sovereign equality’3 of states), the principle of juridical equality is formally established as one of the basic principles of international law. It is affirmed not only in the Charter of the United Nations, but also, for example, in the Charter of the Organisation of American States4 and of the Organisation of African Unity;5 it was included in the Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations.6 The principle was elaborated in the following terms:

‘All States enjoy sovereign equality. They have equal rights and duties and are equal members of the international community, notwithstanding differences of an economic, social, political or other nature.

In particular, sovereign equality includes the following elements:

(a)  States are juridically equal;7

(b)  Each State enjoys the rights inherent in full sovereignty;

(c)  Each State has the duty to respect the personality of other States;

(d)  The territorial integrity and political independence of the State are inviolable;

(e)  Each State has the right freely to choose and develop its political, social, economic and cultural systems;

(f)  Each State has the duty to comply fully and in good faith with its international obligations and to live in peace with other States.’

(p. 341) § 108  Equality of states and international legislation

The legal equality of states as international persons has a number of important consequences.1

The first is that, whenever a question arises which has to be settled by consent, every state has a right to a vote, but, unless it has agreed otherwise,2 to one vote only.

The second consequence is that legally the vote of the weakest and smallest state has, unless otherwise agreed by it, a vote just as the largest and most powerful has. Any alteration of international law by treaty has legal validity for the signatory states and those only who later on accede expressly or are bound by virtue of the treaty’s provisions becoming customary law.3 Accordingly, one result of state equality — or, as some will prefer, of state sovereignty — in the international sphere is that, in the absence of prior agreement by treaty, international law as at present constituted knows of no legislative process in the proper sense of the term, ie the immediate imposition of legally binding rules upon a dissenting state or minority of states.

§ 109  Equality of states and immunity from jurisdiction

It is often said that a third consequence of state equality1 is that — according to the rule par in parem non habet imperium — no state can claim jurisdiction over another.2 The jurisdictional immunity of foreign states has often also been variously — and often (p. 342) simultaneously3 — deduced not only from the principle of equality but also from the principles of independence and of dignity of states. It is doubtful whether any of these considerations supplies a satisfactory basis for the doctrine of immunity. There is no obvious impairment of the rights of equality, or independence, or dignity of a state if it is subjected to ordinary judicial processes within the territory of a foreign state — in particular if that state, as appears to be the tendency in countries under the rule of law, submits to the jurisdiction of its own courts in respect of claims brought against it.4 The grant of immunity from suit amounts in effect to a denial of a legal remedy in respect of what may be a valid legal claim; as such, immunity is open to objection.

However, the practice of states over a long period has established that foreign states enjoy a degree of immunity from the jurisdiction of the courts of another state. This practice has consisted primarily of the application of the internal laws of states by judicial decisions, taking into account, in some states, communications made to the courts by the executive branch of government.5 Consequently the decisions reached have varied in points of detail, and sometimes in substance,6 according to the laws of the different states concerned. Despite (p. 343) these variations, which are now fewer than they once were, state practice is sufficiently established and generally consistent to allow the conclusion that, whatever the doctrinal basis may be, customary international law admits a general rule, to which there are important exceptions, that foreign states cannot be sued.7

That general rule has been reinforced by the conclusion in 1972 of the first general treaty providing for the immunity of foreign states from the jurisdiction of national courts, the European Convention on State Immunity;8 it entered into force on 11 June 1976 and by the end of 1990 had been ratified by eight European states.9 The Convention may be regarded as reflecting with sufficient general accuracy the prevailing rules of international law and the current practice of states in the field of state immunity. The law of state immunity has also been put (p. 344) on a statutory basis by a number of countries,10 including the United Kingdom in the State Immunity Act 1978,11 and the United States of America in the Foreign Sovereign Immunities Act 1976.12 The general rule that states are (p. 345) immune from the jurisdiction of foreign courts is also confirmed in the draft Articles on Jurisdictional Immunities of States and their Property, provisionally adopted by the International Law Commission in 1986.13

Immunity from jurisdiction is invoked primarily in proceedings in which a foreign state or government is in the position of defendant.14 Other defendants may also benefit from state immunity. Thus a provincial authority (to be distinguished from a member state of a federation)15 may sometimes be regarded as in effect part of the government of a state so as to partake of its immunity.16 (p. 346) Similarly a person or body acting on behalf of a state, as an agent or official, may in some circumstances be entitled to claim state immunity when sued in a foreign court in respect of his activities on behalf of the state, since in such circumstances an action against that person can be regarded as impleading the state.17 So too semi-governmental agencies or corporations may, within limits which are not too clearly defined, be regarded as in effect part of the apparatus of government of the state so as to be entitled to state immunity. In some cases the matter may be regulated by an agreement between the states concerned.18 But in the absence of any such agreement entitlement to immunity will primarily depend upon an examination of the instruments by which the corporation is established, in order to determine its relationship to the state. A body which can be regarded as an organ of the state or a department of government will, especially if it has no separate legal personality, usually enjoy immunity;19 its possession of a separate legal personality does not necessarily preclude such a conclusion if it may nevertheless be regarded as so closely linked to the state as to constitute a department of state.20 The possession of separate legal personality does, however, (p. 347) tend against entitlement to immunity, suggesting that the entity concerned is autonomous and cannot really be regarded as part of the organisation of the state.21 In those jurisdictions which refuse immunity in matters iure gestionis, the possession of separate legal personality may indicate that the entity was created to act and was acting iure gestionis, or alternatively the finding that the matters in issue are iure gestionis can lead to a rejection of a plea of immunity irrespective of (p. 348) the nature of the entity’s relationship with the state, or even despite a finding that the entity is a public agency of the state.22

Article 27 of the European Convention on State Immunity 1972 provides that ‘any legal entity of a Contracting State which is distinct therefrom and is capable of suing or being sued, even if that entity has been entrusted with public functions’ is not included in the definition of ‘Contracting State’. Such a legal entity may accordingly be sued in the courts of another contracting state in the same manner as a private person, except in respect of acts performed by it in the exercise of sovereign authority; and in any event the entity may be sued if the courts would in corresponding circumstances have had jurisdiction if the proceedings had been instituted against a contracting state.23

Even if the foreign state is not itself named as defendant, immunity will also be granted to prevent proceedings which indirectly implead the foreign state, where the state would have enjoyed immunity had the proceedings been brought against it.24 This may occur, for instance, where proceedings are brought against or affecting property owned by or in the possession or control of a foreign state (such as a suit in rem brought against a vessel belonging to the state),25 or against (p. 349) a foreign state’s bailee26 or agent.27 However, where a foreign state has an interest in trust or similar property, this is not generally sufficient to stay proceedings relating to the property.28 Furthermore, where a state claims an interest in property which is the subject of proceedings to which it is not a party, the mere assertion of such an interest is not sufficient to oust the jurisdiction of the court: in order to have that effect the claim (unless admitted) must be supported by some evidence, although the state does not have to establish a conclusive title to the property in question.29

(p. 350) Even where a foreign state is properly subject to the jurisdiction of the local courts, execution of any judgment against the state may not as a rule be levied against its property,30 unless it has separately waived its immunity from execution;31 the waiver must usually be express, but in some circumstances (p. 351) waiver by implication is regarded as effective.32 Execution or other forms of attachment are sometimes permitted when the property is not dedicated to public purposes of the state and the proceedings relate to state acts iure gestionis.33 The European Convention on State Immunity 1972 thus, under optional provisions of the Convention, permits execution against a state’s property to enforce a final judgment in proceedings brought against the state in circumstances where the Convention provides for no immunity from jurisdiction, so long as the proceedings related to an industrial or commercial activity in which the state was engaged in the same manner as a private person, and the property in question was used exclusively in connection with such an activity.34

A state, although in principle entitled to immunity, may waive its immunity. It may do so by expressly submitting to the jurisdiction of the court before which it is sued,35 either by express consent given in the context of a particular dispute (p. 352) which has already arisen, or by consent given in advance in a contract or international agreement.36 Where a state has agreed in a contract to submit disputes arising out of the contract to arbitration, courts will usually reject a claim by the state to immunity either in the arbitration proceedings or in proceedings to enforce the arbitration award against it.37 A state may also be (p. 353) considered to have waived its immunity by implication,38 as by instituting or intervening in proceedings,39 or taking any steps in the proceedings relating to the merits of the case.40 Failure by a state to appear in proceedings against it need not prevent the court from being required to give effect to the state’s immunity if (p. 354) the circumstances are such that the state is entitled to immunity.41 A state is not regarded as having waived its immunity if it appears in proceedings against it in order to assert its immunity, or to assert an interest in property which is the subject of proceedings to which it is not a party and where it would have had immunity if the proceedings had been brought against it.42 Where a foreign state has waived its immunity it is subject to the ordinary incidents of procedure.43 Where it has itself instituted proceedings, the foreign state is taken to have waived any immunity in respect of a counter-claim which arises out of the same matter in dispute or which concerns a matter in respect of which it would not have been entitled to immunity if it had been sued in separate proceedings.44 In some cases counter-claims arising out of largely separate circumstances from those giving rise to the principal proceedings have been allowed.45 The (p. 355) submission to the jurisdiction in any particular proceedings is usually also considered to extend to any appeal.46

§ 110  Exceptions to jurisdictional immunity

Although at one time the immunity of a foreign state from the jurisdiction of national courts was regarded by some states, particularly the United Kingdom and the United States of America, as virtually absolute, certain exceptions1 whereby a foreign state’s interests could lawfully be affected by judicial proceedings were widely acknowledged, for example where they related to the administration of a trust or similar fund in which a foreign state might have an interest,2 or to real property owned by the foreign state in the territory of the state of the forum (unless such property was itself in a privileged position, being, for example, diplomatic premises).3 In (p. 356) certain other cases, such as any proceedings in rem against property in which a foreign state claimed an interest, the mere assertion, unsubstantiated by proof, by that state of its interest was not sufficient to oust the jurisdiction of the court.4 So too with regard to loans contracted by governments abroad, the predominant view appears to be that the principle of immunity from jurisdiction does not entail the exemption of such governmental transactions from the operation of the law of the country where they were made.5 Special arrangements have also been made by treaty for withholding, as between the contracting parties, jurisdictional immunity from state-owned ships engaged in commerce.6 As regards proceedings (p. 357) against foreign states arising out of their tortious acts, a degree of local jurisdiction is often asserted.7

More far-reaching, however, has been the distinction drawn by an increasing number of states between the acts of a state in its sovereign capacity (acta jure imperii) and those of a private law or commercial character (acta jure gestionis), immunity not being granted for the latter.8 The adoption of this restrictive attitude to state immunity has been encouraged by the circumstance that the vast expansion of activities of the modern state in the economic sphere has tended to render unworkable a rule which granted to the state operating as a trader a privileged position as compared with private traders. Most states have now abandoned or are in the process of abandoning the rule of absolute immunity, and now accept that, for what are usually described as acts of a private law or commercial nature, a foreign state may be subject to the jurisdiction of the courts: immunity from suit being restricted to proceedings relating to its acts jure imperii. The United States of America adopted the restrictive approach to state immunity in 1952.9 The rule of absolute immunity survived, but subject to (p. 358) increasing hesitation and criticisms,10 in the United Kingdom until the enactment of the State Immunity Act 1978.11 Other states12 which have assumed (p. 359) jurisdiction over foreign states in respect of their acts jure gestionis include Italy,13 Belgium,14 Austria,15 Egypt,16 Switzerland,17 the Federal Republic of (p. 360) Germany,18 France,19 the Netherlands,20 Canada,21 Australia22 and Pakistan.23 A few countries, however, seem still to apply the rule of absolute immunity.24

The general abandonment of the rule of absolute immunity was reflected in the European Convention on State Immunity 1972.25 That Convention provides, in Article 15, that a foreign state enjoys immunity from local courts in all circumstances except those specified in other provisions of the Convention. Those circumstances include most of those which would be regarded as acts jure gestionis, as well as certain others, such as waiver of immunity, which are (p. 361) generally admitted to permit proceedings against a foreign state.26 Broadly speaking, and subject to numerous qualifications written in to the various articles, the Convention provides for a foreign state to be subject to the jurisdiction of the courts where the proceedings relate to an obligation of the state which by contract falls to be discharged in the state of the forum (Article 4); where they relate to a contract of employment between the state and an individual when the work has to be performed on the territory of the state of the forum (Article 5); where they relate to certain matters arising out of the state’s participation with private persons in a company, association or other legal entity having its seat, registered office, or principal place of business in the state of the forum (Article 6); where the state has in the state of the forum an office, agency, or other establishment through which it engages, in the same manner as a private person, in an industrial, commercial or financial activity, and the proceedings relate to that activity of the office, agency, or establishment (Article 7); where the proceedings relate to certain matters concerning patents, trade marks and similar rights (Article 8); where they relate to the state’s rights or interest in, or its use or possession of, immovable property situated in the territory of the forum (Article 9); where they relate to the state’s rights in movable or immovable property arising by way of succession, gifts or bona vacantia (Article 10); where they relate to personal injury or damage to property, if the facts occasioning the injury or damage occurred in the territory of the state of the forum and if the author of the injury or damage was present there when those facts occurred (Article 11); or where they relate to certain aspects of an agreement by the state to submit to arbitration a dispute arising out of a civil or commercial matter (Article 12).

The abandonment of the rule of absolute immunity has been confirmed by the International Law Commission, in the draft Articles on Jurisdictional Immunities of States and their Property, provisionally adopted in 1986.27 Although they provide that a state enjoys immunity from the jurisdiction of the courts of another state (Article 6), they go on to provide exceptions to this rule. These exceptions relate, broadly speaking and subject to qualifications written in to the various articles, to commercial contracts (Article 11; and also Articles 2.1(b) and 3(2)), contracts of employment28 (Article 12), personal injuries29 and damage to (p. 362) property (Article 13), ownership, possession and use of property (Article 14), patents, trade marks and intellectual or industrial property (Article 15), fiscal matters (Article 16), participation in companies or other collective bodies (Article 17), state-owned or state-operated ships engaged in commercial service (Article 18) and arbitration agreements entered into by the state (Article 19).

Although the distinction between acts jure imperii and those jure gestionis has thus become generally accepted in principle, it is not always easy to overcome certain difficulties in practice in applying that distinction. The borderline between the two categories of act is not clear; and even the enumeration of various classes of acts in respect of which jurisdiction may be exercised over a foreign state (as in the European Convention on State Immunity 1972), although helpful, does not remove all uncertainties. In states where the distinction between acts jure imperii and jure gestionis is adopted, it not infrequently happens that courts (even in the same country) reach apparently inconsistent conclusions.30 Acts which have been held to be governmental or sovereign31 acts justifying a claim to immunity if they are the basis of proceedings against the state have included the exchange by a bank of new currency notes for old;32 acts of armed forces during a coup (including torture);33 nationalisation of foreign property;34 the supply of tobacco for the armed forces;35 a contract in furtherance of a national interest in the pursuit of a claim to territory;36 establishing and operating a naval base;37 a lease of premises for a State Tourist Office;38 and contracts for the purchase of equipment for a state’s armed forces.39 On the other hand, acts jure gestionis have (p. 363) been held to include leasing property to be used for diplomatic purposes;40 operating a hostel for students at a state-owned academy;41 and entering into a contract for the repair of embassy premises,42 or for the construction of a railway,43 or for the purchase of cement even if for the use of armed forces.44

§ 111  Equality of states and government action affecting state property

While states thus have considerable immunity from the jurisdiction of the courts of other states, there is a question whether considerations of state equality require that a state must grant any special exemption from action by its executive authorities affecting the property in its territory in foreign states.

Usually state property in another state will be diplomatic1 or consular2 property, or the property of visiting armed forces,3 or the property of state agencies covered by special agreements.4 Such property is subject to special and generally accepted rules, or to the provisions of specific agreements. However, a foreign state’s property may extend, for example, to buildings owned for its investment purposes or to provide accommodation for that state’s official visitors, or former diplomatic premises not yet assigned to a new use,5 or bank accounts in the state’s name and used for purposes ranging from commercial investment to reserves for the state’s currency.6 While a state must respect such property in its territory belonging to a foreign state, and will no doubt treat it with special considerations of courtesy and prudence, there does not seem to be any general requirement in international law that all such property be granted, just because it is state owned, any special inviolability or other exemption from governmental action by the state in which it is situated. Thus it would seem to be liable to (p. 364) temporary seizure or to expropriation, may be the subject of orders restricting the foreign state’s freedom to deal with the property or requiring it to deal with the property in a certain way, and may be subject to taxation.7 In these and similar respects the local governmental action must not be arbitrary and must comply with whatever requirements may be laid down by international law in relation to private foreign-owned property generally, for example as to compensation in the case of expropriation.

A distinction must, however, be drawn between the absence of any inviolability or exemption for the foreign state from such actions, and the enforcement of such actions against it. In many circumstances, and in many states, action of the kinds mentioned above would either require the institution of judicial proceedings, or would offer the foreign state the possibility of resisting the action contemplated by having recourse to the courts. This would raise considerations of sovereign immunity generally and of limitations on execution upon state property,8 and also any procedural or other requirements prescribed by the forum state’s laws.

(p. 365) The right of a state to take action against a foreign state’s property in its territory is acknowledged where the two states are at war,9 or even if they are engaged in a lesser degree of armed conflict or hostilities.10 There are also examples in state practice of a state taking action against a foreign state’s property in other circumstances, usually involving serious tension or differences between the states concerned. The circumstances justifying such action are unclear, as are the permissible limits of the action taken, but blocking the foreign state’s assets,11 a requirement to register such assets, and a prohibition upon financial transactions with the foreign state except under licence are not unusual in this context.12

§ 112  State equality and recognition of foreign official acts: ‘act of state’

A fourth consequence of equality — or independence — of states has become known as the ‘act of state’ doctrine. This is to the effect that the courts of one state do not, as a rule, question the validity or legality of the official acts of another sovereign state1 or the official or officially avowed acts of its agents,2 at any rate (p. 366) insofar as those acts involve the exercise of the state’s public authority,3 purport to take effect within the sphere of the latter’s own jurisdiction4 and are not in themselves contrary to international law.5 The classic statement of the principle was made by the United States Supreme Court in Underhill v Hernandez:

‘Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by (p. 367) reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.’6

The principle applies where the foreign state is itself a party to the proceedings or where its actions are challenged in proceedings to which it is not a party. The principle has since been developed so as (following the evolution of the law relating to sovereign immunity) to be held inapplicable to an act of a foreign state in the course of its commercial activities,7 and, on the other hand, to cover not only direct questioning of the legality of a foreign state’s acts but also proceedings which would require the court to determine the sovereign rights of other states or otherwise enter upon areas of international political sensitivity for which municipal courts are ill-equipped.8

This is not to say that a foreign state’s official acts, usually legislative,9 are (p. 368) never from any point of view subject to examination. This often happens, for example,10 in order to determine whether a law is confiscatory, or a penal or revenue law, and thus to be denied extra-territorial operation11 in the state of the forum in those cases where the law may purport to have such an effect. Similarly, the consistency of a foreign law with international law may be examined.12 Nevertheless, generally, and subject to limits which may vary from one state to another, the lawfulness13 of legislation is not questioned in the courts of another state; instead courts will treat it as properly made and having the effect which it purports to have on matters arising within the jurisdiction of the foreign state concerned. Accordingly, the effects of such governmental acts may be beyond challenge in the courts of other states, and private claims based on such effects may be rejected, if they involve judicial inquiry into the validity or legality of those acts. This restraint upon the questioning of foreign state acts, known especially in the United States of America as the act of state doctrine, may be known differently in other states.14 In particular, English law uses that term in a somewhat different sense;15 nevertheless, substantively the same general rule of (p. 369) judicial restraint is applied by English courts16 although perhaps more restrictively than in the United States.

It is not clear how far this doctrine may properly be regarded as a rule of public international law or whether it belongs essentially to the province of private international law.17 Considerations of public policy have often prevented a full recognition of the validity of foreign legislation.18 There is probably no international judicial authority in support of the proposition that recognition of foreign official acts is affirmatively prescribed by international law.19 The United States (p. 370) Supreme Court has regarded the act of state doctrine in United States law as having its roots in the notion of comity between independent sovereigns,20 buttressed by judicial deference to the exclusive power of the executive branch of government over the conduct of foreign relations because judicial review of acts of state of a foreign state could embarrass the conduct of foreign relations by the political branches of government.21 The relationship between the doctrine and considerations of judicial policy and discretion in the face of possible conflict with the Executive’s responsibilities is strong. The Supreme Court has accordingly held that where the Executive states that application of the act of state doctrine would not advance the interests of American policy, that doctrine should not be applied by the courts, with the result that in such circumstances the court is free to examine the foreign act of state on its merits in the light of those legal principles which would otherwise be inapplicable because of the act of state doctrine.22 The Italian Court of Cassation has, however, held the non-justiciability (p. 371) of acts of foreign states to be a principle of international law, forming part of the Italian legal system.23

§ 113  Foreign legislation contrary to international law

Whatever may be the rule of international law as to the duty of states (and their courts) to recognise the effects of foreign legislation within the foreign country concerned,1 it would appear that there is no such obligation with respect to foreign legislation, whatever the place of its purported effect, which is in itself contrary to international law.2

The matter most frequently arises in connection with the seizure of property without compensation,3 and courts have varied in their approach and their conclusions.4 Sometimes the foreign expropriation law is denied effect on grounds which may have little, if anything, to do directly with its violation of international law. Thus irrespective of its compatibility with international law, it may be held that the law does not have extra-territorial effect,5 or that to give (p. 372) effect to it would be contrary to the public policy of the forum.6 Similarly, where effect is given to the law, the court may not have expressly considered its possible incompatibility with international law,7 or may have inquired into the matter (p. 373) and concluded that the law, or at least its application in the case before the court, did not involve any violation of international law.8 However, in Banco Nacional de Cuba v Sabbatino9 the United States Supreme Court denied the permissibility even of making such an inquiry, thus precluding any possible finding that a foreign law in violation of international law should be denied effect. The Court held that in the absence of a treaty or other unambiguous agreement10 regarding the controlling principles of international law11 (and the Court regarded matters of expropriation without compensation as not yet the subject of any such unambiguous agreement) the act of state doctrine prevented the Court from examining the validity of a taking of property within its own territory by a (p. 374) foreign sovereign government, extant and recognised by the United States at the time of suit, even though the complaint alleged that the taking violated customary international law. Congress subsequently introduced an amendment to the Foreign Assistance Act (the so-called Hickenlooper or Sabbatino amendment) to counteract this decision, by providing that the act of state doctrine was not to preclude determinations on the merits giving effect to the principles of international law where a claim of title or other right to property is asserted which is based upon or traced through a confiscation or other taking after 1 January 1959 in violation of international law, unless inter alai, the President files with the Court a suggestion that the application of the act of state doctrine in a particular case is required by the foreign policy interests of the United States.12 On this basis (or as the result of the ‘Bernstein exception’)13 United States courts have often been able to examine whether a foreign law affecting ownership of property involves a violation of international law, and, if so, to deny effect to it in the United States.14

Other courts have not held themselves inhibited from inquiring into the extent to which a foreign expropriation law is contrary to international law,15 and their (p. 375) conclusions justify the assertion that foreign legislation which is contrary to international law may properly be treated as a nullity and, with regard to rights of property, as incapable of transferring title to the state concerned either within its territory or outside it. Where courts have expressly reached the conclusion that the law (or the action taken under it) was contrary to international law, they have in most cases declined to give effect to it.16 However, some courts,17 while not expressly deciding that the foreign legislation in question violated international law (and thus not actually giving effect to it despite such a violation) have suggested that even if it were contrary to international law effect should nevertheless be given to it; or, having found the law contrary to international law, have said that on that ground alone it should not be denied effect, although going on to deny it effect on some other ground. In such cases the court has tended to regard questions of the violation of international law, and suitable redress therefor, as an inter-governmental rather than a judicial matter, particularly since the international remedy for a taking of property pursuant to legislation in breach of international law is not necessarily invalidity of that law or non-recognition of a private law title to property, but more often the payment of damages to the injured state.

Courts may be under a constitutional compulsion to give effect to the law of their own sovereign legislature even if violative of international law — although they will not lightly impute to it the intention to violate international law18 and although in some countries courts have in fact the power to refuse to give effect to national legislation contrary to international law19 — but there is no compelling reason why they should assist in giving effect to violations of international law by a foreign legislature. In the absence of compulsory-jurisdiction of international (p. 376) tribunals and having regard to the prohibition, under the Charter of the United Nations and elsewhere, of compulsive means of enforcement of international law by national action, municipal courts may on occasions provide the only means for securing respect for international law in this and other spheres. Principle does not countenance a rule which, by reference to international law, obliges courts to endow with legal effect legislative and other acts of foreign states which are in violation of international law;20 and in practice no such international obligation is regarded as existing. However, in view of the practice of states as revealed by the actions of their courts, some of which have been prepared to acknowledge legal effects of foreign acts in violation of international law, it probably cannot be said that international law forbids courts to give effect to such a foreign act when to do so is in accordance with their own national laws.21 It is in any case consistent with principle that such violations of international law on the part of foreign states ought not to be assumed in the absence of evidence of a cogent character.22 Any complaint, on account of a judgment based on any such allegation, of the foreign state concerned is a suitable subject, at the request of that state, for international judicial determination.

§ 114  State equality and non-discrimination

Although states are equal as legal persons in international law, this equality does not require that in all matters a state must treat all other states in the same way. There is in customary international law no clearly established general obligation on a state not to differentiate between other states in the treatment it accords to them.1 The freedom of a state to grant preferential treatment to certain states, or to impose (p. 377) disadvantageous arrangements on others, has long been a valued instrument of policy in the conduct of international relations.2

Nevertheless, discrimination is widely regarded as undesirable, and in some particular respects a rule of non-discrimination may exist, within limits which are not clear. Thus a state party to a multilateral treaty may, as a reflection of its duty to perform treaties in good faith as well as of the equality of states parties to the treaty, be required to apply its terms equally to all other parties. In some circumstances, particularly if there is a strong element of arbitrariness in the different levels of treatment accorded by one state to others, discrimination might constitute an abuse of rights.3 States also have a ‘duty to co-operate with one another, irrespective of the differences in their political, economic and social systems, in the various spheres of international relations, in order to … promote … international co-operation free from discrimination based on such differences’.4

Furthermore, a state may by treaty be under an obligation not to discriminate in the treatment it accords to other parties to the treaty in respect of the subject matter of the treaty. Such a provision has appeared in some major multilateral treaties prepared by the International Law Commission, since the Vienna Convention on Diplomatic Relations 1961.5 Several provisions of the General Agreement on Tariffs and Trade (GATT) are based on non-discrimination.6 A particular kind of non-discrimination obligation is to be found in those treaties (p. 378) containing a ‘most-favoured nation’ clause,7 whereby the grantor state is obliged to accord the state benefiting from such a clause whatever enhanced level of treatment the grantor provides to third states. Treaty obligations not to discriminate are sometimes in general terms, and sometimes related to specific grounds of possible discrimination (most usually in this context, nationality or national origin).

Treaties may not only create obligations not to discriminate, but may also impose on the parties obligations to discriminate positively in favour of another state or group of states. Such a situation arises, for example, where a state is obliged by treaty to give preferential treatment exclusively to another state or states,8 for example as between the members of a customs union. More generally, discrimination by way of granting specially favourable treatment to developing countries has come to be seen as a means whereby developed countries can assist developing countries in their efforts to make economic progress. Such positive discrimination in favour of developing countries is reflected in the Charter of Economic Rights and Duties of States,9 and the grant of special preferences to such states underlies the successive Lomé Conventions concluded between the EEC and certain other states.

The meaning of ‘discrimination’ in this context may need clarification. Mere differences of treatment do not necessarily constitute discrimination: to impose on a state with a notoriously bad economic and financial record harsher terms for an inter-governmental loan than are imposed on a state with an excellent record in those respects is not discriminatory. While everything depends on the particular circumstances of each case, discrimination may in general be said to arise where those who are in all material respects the same are treated differently, or where those who are in material respects different are treated in the same way.10 While treaties usually refer to ‘discrimination’ or ‘non-discrimination’ without definition, they do sometimes go some way to explaining the meaning of those terms, as by specifying at least some particular circumstances which do, or do not, involve discrimination. Thus some of the major multilateral treaties prepared by the International Law Commission provide that discrimination is not regarded as taking place where the state applies any of the provisions of the treaty restrictively because of a restrictive application of that provision by the other state concerned, or where by agreement states extend to each other treatment different from that which is required by the treaty.11

Although not directly related to the equality of states, it is convenient to note here that a state may also be under a duty of non-discrimination in respect of the treatment it accords to individuals within its jurisdiction. Such a duty arises particularly in respect of human rights, for example under the UN Covenants of 1966 on Civil and Political Rights, and on Economic and Social Rights, and under the Convention on the Elimination of All Forms of Discrimination against Women 1979. Such non-discrimination is considered more fully elsewhere.12 Similarly, questions may arise as to the treatment a state accords to aliens compared with the treatment it accords its own nationals; this also raises issues considered more fully elsewhere.13

Footnotes:

As in some of the arguments advanced in relation to certain aspects of the immunity of states from the jurisdiction of foreign courts: see § 109.

See 8th ed of this vol, §§ 116a, 116b and 168e: the matter will be treated in the projected vol III of this work. See also § 575, as to voting procedures at international conferences.

An earlier example of permanent membership of an international organ occurred at the end of the First World War when the special importance of Great Britain, France, Italy, the USA and Japan, who were described in the Treaties of Peace as the ‘Principal Allied and Associated Powers’, was recognised by Art 4 of the Covenant of the League in the composition of the Council, whereon Great Britain, France, Italy, and Japan (the USA having abstained from joining the League of Nations) acquired permanent seats.

Other, less formally established, groupings of the more politically and economically powerful states include the so-called ‘Economic Summit Seven’, comprising the leading industrialised countries — Canada, Federal Republic of Germany, France, Italy, Japan, the UK and the USA — whose leaders meet periodically to discuss mainly global economic matters.

For a critical examination of this term see Kelsen, Yale LJ, 53 (1944), pp 207–20.

Article 6 (UNTS, 119, p 49). See also Art 4 of the Montivideo Convention on the Rights and Duties of States 1933 (AJ, 28 (1934), Suppl, p 75), and the Act of Chapultepec adopted in March 1945 by the Inter-American Conference on War and Peace, which laid down in simple language that ‘all sovereign States are juridically equal among themselves’: AJ, 39 (1945), p 110.

Article III.1; ILM, 2 (1963), p 766.

GA Res 2625 (XXV) (1970): see § 105.

Article 5 of the ILC’s Draft Declaration on Rights and Duties of States provides that ‘Every State has the right to equality in law with every other State’: YBILC (1949), p 288. See also Fitzmaurice, Annuaire: Livre du Centenaire 1873–1973 (1973), at p 230. The ‘New International Economic Order’ (see § 106) is also based on the sovereign equality of states.

The principle of non-intervention has also been ‘presented as a corollary of the principle of the sovereign equality of States’: Military and Paramilitary Activities Case, ICJ Rep (1986), at p 106. Similarly the principle of non-discrimination: see § 114, n 1.

See § 32; and § 575.

See § 11, n 12, and particularly § 10, nn 30–32 as regards the possibility of so-called ‘instant’ custom.

Assuming that the foreign state and its government have been duly recognised by the state in whose courts the proceedings are being taken: see § 47, n 6, and note in particular Wulfsohn v Russian Socialist Republic, cited there (immunity granted to an unrecognised but de facto government). Many of the cases cited at §§ 38–56, are relevant to this section.

On the whole question, see Report by Matsuda and Diena for the League of Nations Codification Committee on ‘The Competence of the Courts in Regard to Foreign States’, C 204 M (1927) V, and AJ, 22 (1928), Special Suppl, pp 118–32, and comment by Kuhn, AJ, 21 (1927), pp 742–47.

The following, in addition to the works referred to below at n 20, and § 110, n 8, is a selection from the extensive literature on jurisdictional immunities of foreign states: Puente, International Law as applied to Foreign States (1928), pp 38–86; Spruth, Gerichtsbarkeit über fremde Staaten (1929); Harv Research, Draft Convention on Competence of Courts in regard to Foreign States, AJ, 26 (1932), Special Suppl, pp 453–736; Provinciali, L’immunità giurisdizionale degli Stati stranieri (1933); Allen, The Position of Foreign States before National Courts, chiefly in Continental Europe (1933); Stoupnitzky, Statut International de l’URSS État commerçant (1936); Fairman, AJ, 22 (1928), pp 569–85; Hervey, Mich Law Rev, 27 (1928–29), pp 751–75; Bosco, Rivista, 21 (1929), pp 35–62; Brinton, AJ, 25 (1931), pp 50–62; Feller, ibid, pp 83–96; Ténékidès, RG 38 (1931), pp 608–32; Fitzmaurice, BY, 14 (1933), pp 101–24; Van Praag, RI, 3rd series, 15 (1934), pp 652–82; Brookfield, JCL, 3rd series, 20 (1938), pp 1–15; Block, HLR, 59 (1946), pp 1060–86; Gmür, Gerichtsbarkeit über fremde Staaten (1948) and Ann Suisse, 7 (1950), pp 9–76; Loewenfeld, Grotius Society, 34 (1949), pp 111–26; Lémonon, Annuaire, 44, i (1952), pp 5–44 (with observations by other members of the Institute at pp 45–136; and see also Annuaire, 45, ii (1954), pp 200–27 for the adoption of a resolution on the subject; H Lauterpacht, BY, 28 (1951), pp 220–72; International Law Association Report, 45 (1952), pp 210–32; and Carabiber, Revue hellénique de droit international, 5 (1952), pp 22–41, and in Clunet, 79 (1952), p 440; Lalive, Hag R, 84 (1953), iii, pp 209–90; Cavaré, RG, 58 (1954), pp 177–207; Cardozo, HLR, 67 (1954), pp 608–18; Hanbury, Current Legal Problems, 8 (1955), pp 1–23; Garcia-Moro, Vir LR, 42 (1956), pp 335–59; Sucharitkul, State Immunities and Trading Activities in International Law (1959), Hag R, 149 (1976), i, pp 87–216, Neth IL Rev, 29 (1982), pp 252–64; van Panhuys, ICLQ, 13 (1964), pp 1193–213; Falk, The Role of Domestic Courts in the International Legal Order (1964), pp 139–69; Lillich, The Protection of Foreign Investment (1965), pp 3–44; Boguslavskiji, Staatliche Immunität (1965); Seidl-Hohenveldern in Gedächtnisschrift Hans Peters (1967); Schaumann and Habscheid, Die Immunität ausländischer Staaten nach Völkerrecht und deutschen Zivilprozessrecht (1968), pp 1–157; L’Immunité de juridiction et d’execution des états (Brussels-Louvain Colloquium, 1969) (1971); Dunbar, Hag R, 132 (1971), i, pp 203–362; Lissitzyn in Transnational Law in a Changing Society (eds Friedmann, Henkin and Lissitzyn, 1972), pp 188–201; Stähelin, Die gewohnheitsrechtliche Regelung der Gerichtsbarkeit über fremde Staaten im Völkerrecht (1969); various, Neth YBIL, 10 (1979), pp 3–289; Sinclair, Hag R, 167 (1980), ii, pp 117–281; Ress, ZöV, 40 (1980), pp 217–71; ILA, Report of the 59th Conference (1980), pp 208–62, and Report of the 60th Conference (1982), pp 5–10 (draft articles adopted by the ILA), 325–48; Sornarajah, ICLQ, 31 (1982), pp 661–86; Higgins, Neth IL Rev, 29 (1982), pp 265–76; UN Legislative Series, Materials on Jurisdictional Immunities of States and their Property (1982) (ST/LEG/SERIES B/20); Crawford, BY, 54 (1983), pp 75–118; Badr, State Immunity (1984); Singer, Harv ILJ, 26 (1985), pp 1–61; Damian, Staatenimmunität und Gerichtszwang (1985); Trooboff, Hag R, 200 (1986), v, pp 235–431; Belinfante, in Realism in Law-Making (ed Bos and Siblesz, 1986), pp 1–6; Restatement (Third), i, pp 390–454; Schreuer, State Immunity (1988). See also n 13, for consideration of the topic by the ILC.

Many cases on sovereign immunity are reported in the successive volumes of the AD and ILR, especially vols 63–65 which are devoted to this subject.

See also, as to public ships engaged in commerce, § 565.

As in The Parlement Belge (1880) 5 PD 197, 207, 214, 220; The Cristina [1938] AC 485, at p 498.

See eg in the UK, the Crown Proceedings Act 1947. There is room for the view that a state which commits a tort or a breach of contract in the territory of another state and claims the right to escape legal liability by reference to the doctrine of immunity in effect impairs the independence of that state as expressed in the normal functioning of its judicial institutions. See also the support given by the Supreme Court of the United States in Larson v Domestic and Foreign Corpn (1949), 337 US 682, 703, to the view that ‘the principle of sovereign immunity is an archaic hangover not consonant with modern morality and that it should therefore be limited whenever possible’.

See § 460.

Eg as regards the application of the rule of absolute immunity or the rule of restrictive immunity whereby immunity is not granted for acts iure gestionis: see § 110.

Before the question of immunity can arise it must first be established that the court would have jurisdiction over the defendant, both as a matter of its substantive rules as to jurisdiction (apart from questions of immunity) and as a matter of its procedural rules relating to service of process. These rules also differ from state to state, and may therefore also lead to different results in different states. As to the position in the UK regarding service under the State Immunity Act 1978, see s 12; and also Westminster City Council v Government of the Islamic Republic of Iran [1986] 1 WLR 979. For the USA, the Foreign Sovereign Immunities Act 1976 contains complex provisions governing the jurisdiction of US courts, including so-called ‘long arm’ jurisdiction based on activities conducted in or having effects in the USA: see § 139, n 42; Delaume, AJ, 74 (1980), pp 640–55; Carey v National Oil Corpn and Libyan Arab Republic, ILM, 17 (1978), p 1180, AJ, 73 (1979), p 694; Upton v Empire of Iran, ILM, 18 (1979), p 103; East Europe Domestic International Sales Corporation v Terra, ILM, 18 (1979), p 977; Thos P Gonzalez Corpn v Consejo Nacional de Production de Costa Rica, AJ, 74 (1980), p 939; Chicago Bridge & Iron Co v Islamic Republic of Iran, ILM, 19 (1980), p 1436. For decisions of Swiss courts denying, on grounds of want of jurisdiction rather than immunity, the right to attach a foreign state’s assets, see Kingdom of Greece v Banque Julius Bär et Cie, ILR, 23 (1956), p 195; Socialist People’s Libyan Arab Jamahiriya v Libyan American Oil Co, ILM, 20 (1981), p 151.

Thus Art 15 of the European Convention on State Immunity 1972, s 1604 of the Foreign Sovereign Immunities Act 1976 of the USA and s 1(1) of the State Immunity Act 1978 of the UK all prescribe a general rule of immunity to which there are specified exceptions within which proceedings must fall if they are to be permitted.

As to the practice in other countries, a number of works cited at n 2, contains full summaries; and also §§ 110, n 8, and 110, n 12.

For the text of the Convention, see Cmnd 5081, which also, at pp 24–55, contains explanatory reports on the Convention and its Optional Protocol; TS No 74 (1979). For comment see Sinclair, ICLQ, 22 (1973), pp 254–83; Vallée, Revue Trimestrielle de Droit Européen, 9 (1973), pp 205–41; Wiederkehr, AFDI, 20 (1974), pp 924–43.

Apart from provisions dealing with the circumstances in which there is no immunity from jurisdiction (see § 110) the Convention also lays down certain procedural rules to be followed in proceedings against a foreign state (Arts 16–19), and provides certain obligations for states to give effect to judgments given against them, although still precluding measures of execution or preventive measures against state property (Arts 20–23). There is also an optional provision for states to declare that their courts may exercise jurisdiction against foreign states even in cases not covered by Arts 1–13 (Arts 24–26). Certain general provisions include savings as regards such matters as proceedings concerning social security, customs duties, taxes or penalties (Art 29), ships (Art 30), visiting forces (Art 31) and diplomatic and consular immunities (Art 32). There is an optional Additional Protocol establishing procedures for the settlement of disputes arising from the application of the Convention.

Austria, Belgium, Cyprus, Federal Republic of Germany, Luxembourg, the Netherlands, Switzerland and the UK. Portugal has signed but not ratified the Convention. The Additional Protocol to the Convention had, by the same date, been ratified by Austria, Belgium, Cyprus, Luxembourg, the Netherlands and Switzerland; and signed, but not ratified, by the Federal Republic of Germany and Portugal.

10  Eg Canada — State Immunity Act 1982, ILM, 21 (1982), p 798; Australia — Foreign States Immunities Act 1985, ILM, 25 (1986), p 715 (and see also the Report of the Australian Law Reform Commission, ILM, 23 (1984), p 1398).

11  In accordance with s 23 the Act entered into force on 22 November 1978. The principal provisions of the Act, whereby foreign states are not immune from the jurisdiction in certain specified circumstances, do not apply to proceedings in respect of matters that occurred before that date. See generally on the Act, Delaume, AJ, 73 (1979), pp 189–99; Mann, BY, 50 (1979), pp 43–62; Higgins, Neth YBIL, 10 (1979), pp 35, 42–52, and AFDI, 29 (1983), pp 23–35; Sinclair, Hag R, 167 (1980), ii, pp 117, 257–65; Dicey and Morris, Rule 20; Lewis, State and Diplomatic Immunity (3rd ed, 1990), pp 7–122.

As to the recognition and enforcement in the UK of judgments given abroad against states other than the UK, see Civil Jurisdiction and Judgments Act 1982, s 31.

See generally as to the former rules of English law, Dicey, Conflict of Laws (9th ed, 1973), Rule 19; Hanbury, Current Legal Problems, 8 (1955), pp 1–23; Dunbar, Hag R, 132 (1971), i, pp 258–351; Johnson, Aust YBIL, 6 (1974–75), pp 1–51. For an early assertion of the immunity of foreign sovereigns in English law, see De Haber v The Queen of Portugal (1851) 17 QB 171. Other leading English cases, many of which are still relevant even after the enactment of the State Immunity Act 1978, are cited in the following pages.

12  ILM, 15 (1976), p 1388. For the draft of this legislation as presented to Congress, together with a section-by-section analysis of the draft, see ibid, p 88; see also ibid, p 1398, for the Congressional Judiciary Committee’s Report on the Bill, and ibid, 12 (1973), p 118, for an earlier draft of the Bill. For comment see Delaume, AJ, 67 (1973), pp 745–56, and ibid, 70 (1976), pp 529–43, and ibid, 71 (1977), pp 399–422; Atkeson, Perkins and Wyatt, ibid, 70 (1976), pp 298–321; Brower, Bistline and Loomis, AJ, 73 (1979), pp 200–14; Meal and Trachtman, Harv ILJ, 20 (1979), pp 583, 584–601; Smit, AS Proceedings (1980), pp 49–70 (and other comments, pp 70–81); Sinclair, Hag R, 167 (1980), ii, pp 117, 246–57; Feldman, ICLQ, 35 (1986), pp 302–19. For proposed amendments, see Atkeson and Ramsey, AJ, 79 (1985), p 770–89, and for amendments adopted in 1988, see ILM, 28 (1989), p 396, and Kahale, Journal of International Arbitration, 6 (1989), No 2, pp 57–64.

For State Department regulations concerning service on foreign states, see ILM, 15 (1976), p 159; and ibid, p 1437, for the text of a letter from the Legal Adviser to the State Department on how the Department will in future treat questions of state immunity; and ILM 18 (1979), p 1177 for a State Department memorandum giving guidance on service of process on foreign states. But see New England Merchants National Bank v Iran Power and Transmission Co, AJ, 75 (1981), p 374, allowing service by telex in the exceptional circumstances of US-Iran relations at the time; and comment by Cher, Harv ILJ, 20 (1981), pp 775–84. But cf the somewhat different conclusion reached by an English court in broadly analogous circumstances in Westminster City Council v Government of the Islamic Republic of Iran [1986] 1 WLR 979. One of the major procedural changes made by the Foreign Sovereign Immunities Act 1976 is that after its entry into force (19 January 1977) questions of entitlement to immunity are determined by the courts and not by the State Department, whose former practice of issuing ‘suggestions’ of immunity, which were generally treated as binding on the courts, has now been discontinued. Despite this change, however, the State Department still, from time to time, makes its views known to the courts, either in response to requests from the courts or by filing an amicus curiae brief. See also AJ, 81 (1987), pp 643–6. The Act permits suits by alien plaintiffs against foreign states: Verlinden BV v Central Bank of Nigeria, 103 S Ct 1962, ILM, 22 (1983), p 647.

The Act does not apply to events pre-dating the so-called ‘Tate letter’ of 1952 (see § 110, n 9): Jackson v People’s Republic of China, ILM, 25 (1986), p 1466; Carl Marks & Co v Union of Soviet Socialist Republics, AJ, 82 (1988), p 129. As to its possible application to events occurring in the period 1952–77 the matter would appear open; but see Yessenin-Volpin v Novosti Press Agency (1978) 443 F Supp 849.

As to the former rules applicable in the USA, see generally Hyde, i, §§ 246, 258; Whiteman, Digest, 6, pp 553–726; Restatement (2nd), pp 193–228. For a summary of sovereign immunity decisions of the Department of State between May 1952 and the entry into force of the Foreign Sovereign Immunities Act in January 1977, see Digest of US Practice in International Law (1977), pp 1017–89.

13  Article 6: YBILC (1986), ii, pt 2, p 8. The ILC began consideration of the topic in 1978. See the successive reports of the ILC’s Special Rapporteur on this topic from 1979–91. For comment on the ILC’s draft articles, see Greig, ICLQ, 38 (1989), pp 243–76, 560–88. The ILC adopted final draft articles at its 1991 session.

See also Art II of the draft articles for a Convention on State Immunity adopted by the ILA at its 60th Conference (1982), reprinted in ILM, 22 (1983), p 287; and Art 1 of the Inter-American Draft Convention on Jurisdictional Immunity of States, approved by the Inter-American Juridical Committee in 1983: ibid, p 292.

14  The provisions of the European Convention on State Immunity are in terms of ‘a Contracting State’ being (or not being) entitled to immunity from the jurisdiction: that term is not defined, except by the exclusion of separate legal entities (Art 27: see p 348). The draft articles provisionally adopted by the ILC in 1986 (YBILC, 1986, ii, pt 2, p 8) provide that the term ‘State’ comprehends (a) the state and its various organs of government, (b) political sub-divisions of the state which are entitled to perform acts in the exercise of the sovereign authority of the state, (c) agencies or instrumentalities of the state, to the extent that they are entitled to perform acts in the exercise of the sovereign authority of the state, and (d) representatives of the state acting in that capacity: Art 3.1. See also Art 7.3, to the effect that proceedings instituted against any of the above are to be considered as having been instituted against the state.

For the UK s 14(1) of the State Immunity Act 1978 provides that the immunities from jurisdiction provided for in Part I of the Act ‘apply to any foreign or Commonwealth State other than the United Kingdom, and references to a State include references to — (a) the sovereign or other head of that State in his public capacity; (b) the government of that State; and (c) any department of that government; but not to any entity … which is distinct from the executive organs of the government of the State and capable of suing or being sued’: as to those separate entities, see n 23. In the USA the Foreign Sovereign Immunities Act 1976 refers to a ‘foreign State’ as entitled (or not) to immunity, but by way of a definition only provides in s 1603(a) that the term ‘includes a political subdivision of a foreign State or an agency or instrumentality of a foreign State as defined in subsection (b)’ (as to which, see n 23).

See further § 451, as to the immunity of Heads of State. See also, as to the identification of ‘sovereigns’ for purposes of sovereign immunity, Varges, Harv ILJ, 26 (1985), pp 103–54.

15  As to which see § 75, n 12. See also § 82, n 4, as to immunity from suit of states under protection; § 84, n 11 as to colonies; and § 95, n 9, para 3, as to territories under trusteeship. As to the particular, and in some respects anomalous, position of Berlin, with the members of the Allied Kommandatura, Berlin, being part of the Government of the continuing State of ‘Germany’, see Trawnik v Gordon Lennox [1985] 2 All ER 368; and Heidelmeyer, ZöV, 46 (1986), pp 519–36; and see generally § 40, n 35ff.

16  Swiss-Israel Trade Bank v Government of Salta [1972] 1 Lloyd’s Rep 497 (granting immunity to a provincial government in Argentina, which the court treated as a unitary and not a federal state). It is a question to be decided in each case whether the authority in question is sufficiently closely connected with the government of the state to justify the conclusion that the proceedings against the authority are tantamount to proceedings against the government. In Schneider v City of Rome, AD, 15 (1948), p 131, and Rousse and Maber v Banque d’Espagne, AD (1935–37), No 67, the City of Rome and the Basque Province of Spain, respectively, were held not entitled to immunity.

Under Art 27 of the European Convention on State Immunity 1972 a political sub-division of a state which is both distinct from the state and capable of suing and being sued may be sued except in respect of acts performed by it in the exercise of sovereign authority. For the UK s 14 of the State Immunity Act 1978 is to similar effect. For the USA s 1603(a) of the Foreign Sovereign Immunities Act 1976 includes political sub-divisions in the definition of ‘foreign State’, so that they enjoy immunity in the same circumstances as a state. See n 14, as to the ILC’s draft articles 1986.

17  See Rahimtoola v Nizam of Hyderabad [1958] AC, 379; Waltier v Thomson (1960), ILR, 31, p 397; Martin v Bank of Spain, ILR, 1952, No 42; Wacker v Bisson (1965), AJ, 60 (1966), p 401; Johnson v Turner, ILR, 21 (1954), p 103; Bradford v Director-General of Railroads of Mexico, AD (1925–26), No 132; Lamont v Travelers Insurance Co, AD, 9 (1938–40), No 73; Oliner v Canadian Pacific Railway, AJ, 65 (1971), p 205; Smith v Canadian Javelin Ltd, ILM, 15 (1976), p 319. But compare Pilger v US Steel Corpn, AD, 3 (1925–26), No 131, where the English Public Trustee was allowed to be sued in an American court (see Mich Law Rev, 24 (1926), pp 729, 730); Saorstat and Continental SS Co v Rafael de las Morenas, AD, 12 (1943–45), No 25. As to the ILC’s draft articles, 1986, see § n 14.

It is not always clear in some cases whether an action against a person who happens to be a diplomatic or consular officer of the defendant state is treated as involving diplomatic or consular immunity as opposed to immunity as an agent for his state; there is a borderline between the two which is not always easy to discern. See eg Oster v Dominion of Canada, ILR, 23 (1956), p 433; Waltier v Thomson, above; Caravel Office Building Co and Hynning v Peruvian Air Attaché, ILM, 14 (1975), p 1435; Intpro Properties (UK) Ltd v Sauvel [1983] QB 1019.

18  This is particularly likely where the body closely associated with a state is to be established either permanently or for a considerable time in another state: see § 568.

19  Compania Mercantil Argentina v United States Shipping Board (1924) 40 TLR 601; Krajina v The Tass Agency [1949] 2 All ER 274 (see Carter, ILQ, 3 (1950), pp 78–86); Lahalle and Levard v American Battle Monuments Commission, AD, 8 (1935–37), No 88; Davies v The Tass Agency (noted by Butler, MLR, 35 (1972), p 189); Piasik v British Ministry of War Transport, AD, 12 (1943–45), No 22; Yessenin-Volpin v Novosti Press Agency and Tass, ILM, 17 (1978), p 720.

Entitlement to immunity is, for those countries which distinguish between acts iure imperii and iure gestionis, dependent also on the proceedings relating to acts in the former category.

20  See Baccus SRL v Servicio Nacional del Trigo [1957] 1 QB 438, holding that an organisation may be so closely linked to the state as to constitute a department of state, and that a state may confer separate legal personality upon such a department without thereby forfeiting the right to claim immunity in proceedings instituted against it (see Wedderburn, ICLQ, 6 (1957), pp 290–300, Cohn, LQR, 73 (1957), pp 26–9, and Mann, MLR, 20 (1957), pp 273–5 for comment): see also eg Floridi v Sovexportfilm (1951), AJ, 49 (1955), p 98; Mellenger v New Brunswick Development Corpn [1971] 2 All ER 593; Matter of Sedco Inc, ILM, 21 (1982), p 318 (as to Petroléos Mexicanos, the national oil company of Mexico); First National City Bank v Banco para el Commercio Exterior de Cuba (1983) 103 S Ct 2591, ILM, 22 (1983), 840 (as to the Cuban credit institution for foreign trade); Dayton v Czechoslovak Socialist Republic, AJ, 82 (1988), p 585 (as to a Czech state trading company). Cf Trendtex Trading Corpn v Central Bank of Nigeria [1977] QB 529, holding the Central Bank not to be a department of the Government of Nigeria; Swiss-Israel Trade Bank v Government of Salta [1972] 1 Lloyd’s Rep 497; Czarnikow Ltd v Rolimpex [1979] AC 351 (as to the Polish State sugar marketing enterprise); Qureshi v USSR, ILM, 20 (1981), p 1060 (as to the Soviet Trade Representation in Pakistan); O’Connell Machinery Co v MV Americana, AJ, 78 (1984), p 897 (as to a shipping line indirectly owned by the Italian Government).

See generally on immunities of semi-governmental corporations Kuhn, AJ, 39 (1945), pp 772–5; Fawcett, BY, 25 (1948), pp 34–51; Fensterwald, HLR, 63 (1950), pp 614–42; Shepard, Sovereignty and State-Owned Commercial Entities (1951); Friedmann, AJ, 50 (1956), at pp 482–7; Sucharitkul, State Immunities and Trading Activities in International Law (1959); Böckstiegel, Der Staat als Vertragspartner Auslänsischer Privatunternehman (1971); Schmitthoff, ICLQ, 7 (1958), pp 452–67; De Visscher, Hag R, 102 (1961), i, pp 418–26. The Work of the Asian-African Legal Consultative Committee 1956–74 (1974, published by the Secretariat of the Committee) contains, inter alia, texts on the immunities of state trading corporations on which the Committee reached agreement. See also Moorthy, ICLQ, 30 (1981), pp 638–59, with particular reference to the Malaysian National Oil Corporation. Many of the works cited at n 2, discuss the position of semi-governmental corporations.

21  It was held in Hannes v Kingdom of Roumania Monopolies Institute (1940) 20 NYS (2d) 825; AD (1938–40), No 72, that an autonomous corporation created and controlled by a foreign government for exploiting commercial monopolies is not necessarily immune from suit. A corporation created by the state but possessing a distinct legal personality has been held not immune from suit unless it can be proved that the property which is the subject matter of the action is the property of the state: Ulen & Co v (Polish) National Economic Bank (1940) 24 NYS (2d) 201; AD (1938–40), No 74. As to immunities of corporations controlled by governments, see also Re Distribution of Petroleum (1952) 13 Fed R; AJ 47 (1953), p 502; ILR, 19 (1952), p 197; where a US court held that the Anglo-Iranian Oil Co, being in part ownership and control of the British Government, was immune from subpoena. See also Coale v Soc Cooperative Suisse des Charbons, AD, 1 (1919–22), No 88; US v Deutsche Kalisyndikat Gesellschaft, AD, 5 (1929–30), No 71; National Iranian Oil Co v Saphire International Petroleum Ltd (1963), ILR, 47, p 396; Letelier v Chile, AJ, 79 (1985), p 447; Société Air Zaire v Gautier et van Impe, RG, 88 (1984), p 977. In First National City Bank v Banco para el Commercio Exterior de Cuba, 103 S Ct 2591, ILM, 22 (1983), p 840, the US Supreme Court held that government instrumentalities established as separate juridical entities are presumed to have an independent status, but this presumption can be disregarded in the interests of justice; and see Foremost-McKesson Inc v Islamic Republic of Iran, AJ, 84 (1990), p 922. Questions as to the statal nature of an organisation may arise in other contexts relating to a state’s international obligations: see eg Foster v British Gas plc [1988] ICR 584, holding that a body has a statal character if it is ‘an independent public authority charged by the State with the performance of any of the classic duties of the State, such as the defence of the realm or the maintenance of law and order within the realm’ (and see later proceedings, holding British Gas to be a public service body for the purposes in question: [1991] 2 WLR 258 (European Court of Justice, Case C 188/89), [1991] 2 WLR 1075 (House of Lords)).

There may be cases in which a court declines jurisdiction on the ground that the corporation, irrespective of its status as in effect part of the state, has acted as an agent of the state: Martin v Bank of Spain, ILR, 19 (1952), No. 42. See also n 17, as to the immunity of an agent of a state.

22  See eg Mirabella v Banco Industrial de la República Argentina, AJ, 57 (1963), p 930; Borga v Russian Trade Delegation, ILR, 22 (1955), p 235; Amkor Corpn v Bank of Korea, AJ, 64 (1970), p 414; Passelaigues v Mortgage Bank of Norway, ILR, 22 (1955), p 227; Chilean Copper Corpn Case, ILM, 12 (1973), pp 182, 188–9; Borg v Caisse Nationale D’épargne Française, AD, 3 (1925–26), No 122; Non-resident Petitioner v Central Bank of Nigeria, ILM, 16 (1977), p 501.

23  The ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8) provide for ‘agencies or instrumentalities of the State, to the extent that they are entitled to perform acts in the exercise of the Sovereign authority of the State’ to be comprehended within the meaning of the term ‘State’ for the purpose of those articles: Art 3.1 (c). See also Art 7.3.

For the UK s 14(1) and (2) of the State Immunity Act 1978 are to similar effect. On the other hand, s 1603(a) and (b) of the Foreign Sovereign Immunities Act 1976 of the USA include an ‘agency or instrumentality of a foreign State’ within the meaning of the term ‘foreign State’, such an agency or instrumentality being defined as an entity which is a separate legal person, corporate or otherwise, and which is an organ of a foreign state or political sub-division thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political sub-division thereof, and which is neither a citizen of a state of the USA nor created under the laws of any third country.

24  By s 6(4) of the State Immunity Act 1978 a court in the UK may not entertain proceedings against a person other than a state if they relate to property which is ‘in the possession or control of a State’ or in which a state ‘claims an interest’ (which claim is admitted or supported by prima facie evidence), provided that the state would have been immune had the proceedings been brought against it. In the USA the Foreign Sovereign Immunities Act 1976 appears only to affect the law in this matter in relation to certain suits in admiralty: see s 1605(b).

The ILC’s draft Articles on the Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8) provide that proceedings are to be considered as having been brought against a state, whether or not it is named as a party, if the proceedings in effect seek to compel the state either to submit to the jurisdiction of the court or to bear the consequences of a determination by the court which may affect its property, rights, interests or activities, or if the proceedings are designed to deprive the state of its property or of the use of property in its possession or control: Arts 7.2 and 3.

25  The Exchange v McFaddon (1812) 7 Cranch 116, Scott, Cases, 300; De Haber v The Queen of Portugal(1851) 17 QB 171; Vavasseur v Krupp (1878) LR 9 Ch D 351; The Constitution (1879) 4 PD 39; The Parlement Belge (1879) 4 PD 129, (1880) 5 PD 197; The Cristina [1938] AC 485; The Arantzatzu Mendi [1939] AC 256; Flota Maritima Browning de Cuba SA v SS Canadian Conqueror (1962) 34 DLR 2d 628; AJ 57 (1963), p 440; Spacil v Crowe, ILM, 13 (1974), p 436 (see also ibid, p 120, and Leigh, AJ, 68 (1974), pp 280–9). See also below § 110, n 6. US courts have attached greater weight to the property being actually in the possession of the foreign state, not being merely claimed by it. Thus a vessel owned by a state, but chartered to a private company, has been held not entitled to immunity in proceedings arising out of its use by the charterer: Republic of Mexico v Hoffman (1945), 324 US 30; see also The Navemar (1938), 303 US 68. Under the Foreign Sovereign Immunities Act 1976 ships owned by foreign states are immune from arrest, but the in rem jurisdiction over the vessel’s owner which is thus precluded is replaced by an in personam jurisdiction limited to the value of the vessel and cargo: see § 1605(b), and Velidor v L/P/G Benghazi, ILM, 21 (1982), p 621. In The Annette [1919] P 105 the foreign state involved claimed only possession of the vessel, not being at the time in possession, and a claim to immunity was rejected. In I Congreso del Partido [1983] AC 244 it was held that international law did not entitle a state to immunity where an action in rem was brought against an ordinary trading ship owned by it if, in the light of the whole context, the act as a result of which the claims arose was itself a private commercial act, rather than a sovereign act. As to questions of sovereign immunity which arose over the requisition of ships during the Spanish Civil War, see Preuss, AJ, 35 (1941), pp 263–81.

The procedure whereby funds deposited with a third party to the defendant’s credit may be attached in proceedings quasi in rem has been held by US courts to allow proceedings to be maintained against a foreign state defendant: see Amoco Overseas Oil Co v Compagnie Nationale Algérienne de Navigation, ILM, 18 (1979), p 109. But the use of attachment to found jurisdiction is now prohibited by the Foreign Sovereign Immunities Act 1976, s 1610. Prejudgment attachment of assets in order to provide security for the plaintiff may be subject to stricter rules than attachment to found jurisdiction: see n 36.

See generally as to the grant of immunity on the basis of a foreign state’s ownership, possession or control of property, Dunbar, Hag R, 132 (1971), i, pp 237–57, 285–351; Dicey and Morris, Rule 20, at pp 240, 249–53. As to the position generally of state-owned ships, see § 110, n 6, and § 565.

26  USA and France v Dollfus Mieg et Cie [1952] AC 582. For comment see Carter, ILQ, 3 (1950), pp 78–86, and ICLQ, 1 (1952), pp 543–9.

27  See n 17.

28  Larivière v Morgan (1872) LR 7 Ch 550; LR 7 HL 423, 430; Re Russian Bank for Foreign Trade [1933] Ch D 745; Nizam of Hyderabad v Jung [1957] 1 Ch 185, 250, and on appeal sub nom Rahimtoola v Nizam of Hyderabad [1958] AC 379, 420 (and comment by Mann, MLR, 21 (1958), pp 165–9); Procureur Général v Vestwig, AD, 13 (1946), No 32; Institute Indo-Portuguese v Borges (1958), ILR, 27, p 111; Maharaj Indrajitsinghji v HH Maharaja Rajendrasinghji Vijaysinghji, ILR, 22 (1955), p 244 (as to probate proceedings).

See generally Arts 10 and 14 of the European Convention on State Immunity 1972; Art 14.1(e) of the ILC’s draft Articles on the Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8); and, for the UK, State Immunity Act 1978, s 6(2) and (3). For the USA, § 1605(a)(4) of the Foreign Sovereign Immunities Act 1976 is more limited.

The winding up of a company does not implead a foreign state which is simply a creditor: see In re Rafidain Bank (The Times, 22 July 1991), and State Immunity Act 1978, s 6(3).

29  See Haile Selassie v Cable and Wireless Ltd (No 1) [1938] Ch 545, 839. See also The Jupiter (No 2) [1925] P 69; The Jupiter (No 3) [1927] P 122; Lamont v The Travelers Insurance Company (1939) 24 NE (2d) 81; AJ, 34 (1940), p 349; AD (1938–40), No 73; Republic of Mexico v Hoffman (1945) 324 US 30; AD, 12 (1943–45), p 143. See also The Navemar (1938) 303 US 68; AJ 32 (1938), p 381; AD (1938–40), No 68, on the authority and the degree of conclusiveness of the declarations of the foreign government. In The Kabalo the court accepted the statement of the Belgian Ambassador as conclusive evidence of the legality of possession resulting from requisition by the Belgian Government — though not necessarily of the fact of possession: (1940) 67 Ll. L Rep, p 572; AD, 9 (1938–40), No. 92. See § 460 on the conclusiveness of the statement of the executive departments.

Although the foreign state does not have to establish title to the property, it must show its claim to be neither illusory nor founded on a title manifestly defective: Juan Ismael & Co Inc v Government of Indonesia [1955] AC 72, with comment by Carter, ICLQ, 4 (1955), pp 469–75; Compare Indian National Steamship Co v Maux Faulbaum, ILR (1955), p 248, and Stephen v Zivnostenska Banka National Corpn, AJ, 55 (1961), p 748, and 56 (1962), p 848. For the UK s 6(4) of the State Immunity Act 1978 requires ‘prima facie evidence’ in support of the foreign state’s claim, as does Art 14.2 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC, ii, pt 2, p 8). Note that the House of Lords has observed that the rule propounded in the Juan Ismael case was not to be extended further than was strictly necessary: Shearson Lehman Brothers Inc v Maclaine Watson & Co Ltd (No 2) [1988] 1 WLR 16, 29–31.

30  European Convention on State Immunity 1972, Art 23. Chapter III of the Convention imposes certain obligations on parties to give effect to judgments against them in conformity with the Convention. See also Arts 21–23 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8); as to the UK, State Immunity Act 1978, s 13(2)(b); and as to the USA, Foreign Sovereign Immunities Act 1976, §§ 1609–11. See also Duff Development Co v Government of Kelantan [1924] AC 797, and also Note (1) to that case in AD, 2 (1923–24), No 65; Dexter and Carpenter v Kunglig Jarnvagsstyrelsen et al, decided in 1930 by the US District Court of Appeals: 43 F (2d) 705; AD, 5 (1929–30), No 70 (with comment by Jessup and Deák, AJ, 25 (1931), pp 335–9); Socifros v USSR, AD, 9 (1938–40), No 80; New York and Cuba Mail SS Co v Republic of Korea, ILR, 22 (1955), p 220; Weilamann v The Chase Manhattan Bank (1959), ILR, 28, p 165; Caisse Centrale de Cooperation Economique v Soc Midland International Service et Etat du Sénégal, RG, 88 (1984), p 513; Republic of Zaire v Duclaux, Neth YBIL, 20 (1989), p 296 (as to bankruptcy proceedings brought against a foreign state). While the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 (see § 407, n 49) excludes immunity from suit for disputes within its scope, it does not affect the rules in contracting states relating to immunity from execution: Arts 54(1) and 55.

As to the unlawfulness of a garnishee order served on a foreign state, see Garnishee Order against Foreign Legation (Germany) Case (1961), ILR, 32, p 122. As to the unlawfulness of garnishee proceedings served on a third party holding accounts maintained by the foreign state, see Re the Republic of the Philippines, AJ 73 (1979), pp 305, 703 (concerning an embassy account); Alcom Ltd v Republic of Columbia [1984] AC 580, refusing a garnishee order on an Embassy account unless established that the whole account was used for commercial purposes (see also Ghandi, MLR, 47 (1984), pp 597–603; Fox ICLQ, 34 (1985), pp 115–41). Cf Birch Shipping Corpn v Embassy of Tanzania, AJ, 75 (1981), p 373 (garnishee order allowed where embassy account is used, even if only in part, for commercial activity); Re Prejudgment Garnishment against National Iranian Oil Co, ILM, 22 (1983), p 1279 (immunity from garnishee order only to be granted in respect of assets serving activities pertaining to governmental functions). Garnishee proceedings against the assets of a state agency may be subject to less restrictive rules than those against state assets: see Sonatrach v Migeon, ILM, 26 (1987), p 998. As to embassy bank accounts see generally § 497, n 2.

The courts of a number (though only of a minority) of states have permitted execution. See H. Lauterpacht, BY, 28 (1951), pp 241–2. In 1951 a Belgian court, in a fully reasoned decision, affirmed its jurisdiction to order execution: Société Commerciale de Belgique v L’Etat Hellénique, Clunet, 79 (1952), p 244. In Société Européenne d’Etudes et d’Entreprises v Yugoslavia (1973), ILM, 14 (1975), p 71, the High Council of the Netherlands held that no rule of international law opposed every execution of foreign state assets situated in the territory of another state (at p 76). In Italy execution is, under a law of 1926, permitted with the authorisation of the Italian Ministry of Justice: see Condorelli and Sbolci, Neth YBIL, 10 (1979), pp 197–231, and Socialist People’s Libyan Arab Jamahiriya v Rossbeton, AJ, 84 (1990), p 573. See also Government of Peru v SA Sociedad Industrial Financiera Argentina SIFAR (1958), ILR, 26, p 195.

31  See generally on immunity from execution Kuhn, AJ, 28 (1934), pp 119–22; Castel, AJ, 46 (1952), pp 520–6; Vennemann in L’Immunité de Jurisdiction et d’Exécution des Etats (Brussels-Louvain Colloquium 1969) (1971), pp 119–80; Sinclair, ICLQ, 22 (1973), at pp 273–6, and Hag R, 167 (1980), ii, pp 218–42; various contributors to Neth YBIL, 10 (1979), pp 3–289, commenting on the position in several states; Crawford, AJ, 75 (1981), pp 820–69; Fox, ICLQ, 34 (1985), pp 115–41. See n 36, as to waivers in relation to pre-judgment attachment of property.

32  See Art 23 of the European Convention on State Immunity 1972, and, for the UK, s 13(3) of the State Immunity Act 1978, which require the consent to execution to be express and in writing. As to the USA, see the Foreign Sovereign Immunities Act 1976, ss 1610–11. In Flota Maritima Browning de Cuba SA v MV Ciudad de la Habana (1963), ILR, 35, p 122, it was held by a US court that a state may waive its immunity from execution by implication: and the sections of the Foreign Sovereign Immunities Act just referred to permit, to the extent that they provide for waiver of immunity from execution, waiver ‘either explicitly or by implication’.

33  See UAR v Dame X, AJ, 55 (1961), p 167; Weinmann v Republic of Latvia (1959), ILR, 28, p 385; Tietz v People’s Republic of Bulgaria, ibid, p 369; Socobelge v Greek State, AJ, 47 (1953), p 508; Englander v Statni Banka Ceskoslavenska, RG, 73 (1969), p 1148; Monopole des Tabacs de Turquie v Régie Co-Intéressée des Taacs de Turquie, AD (1929–30), No 79; State Immunity (Switzerland) (No 2) Case, AD, 10 (1941–42), No 62; Egyptian Delta Rice Mills Co v Comisaria General de Abastecimientos y Transportes de Madrid, AD, 12 (1943–45), No 27; Soviet Distillery in Austria Case, ILR, 21 (1954), p 101; Trendtex Trading Corpn v Central Bank of Nigeria [1977] QB 529; Hispano Americana Mercantil SA v Central Bank of Nigeria [1979] 2 Lloyd’s Rep 277; Société Air Zaire v Gautier et van Impe, RG, 88 (1984), p 977; Eurodif et Sofidif v République Islamique d’Iran, RG, 89 (1985), p 813, ILM, 23 (1984), p 1062; Sonatrach v Migeon, ILM, 26 (1987), p 998.

34  See Ch IV, especially Art 26. By the end of 1990 six of the states which by then had ratified the Convention had accepted these optional provisions. For the UK, see s 13(4) of the State Immunity Act 1978; note also s 14(3) relating to separate entities, and s 14(4) relating to property of a state’s central bank or other monetary authority. In the USA, s 1610 of the Foreign Sovereign Immunities Act 1976 allows execution to be levied upon a foreign state’s property used for a commercial activity if the property was used for the commercial activity upon which the claim was based; but note s 1611 which does not allow execution upon the property of a central bank or monetary authority held for its own account. See also Jayakumar, AJ, 64 (1970), pp 371–5, as to certain actions taken in Singapore against the Bank of China.

35  See the European Convention on State Immunity 1972, Art 2; and Art 8 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC, ii, pt 2, p 8), and Art 19 as regards the effect of a state entering into an arbitration agreement. For the UK, see the State Immunity Act 1978, s 2(1) and (2); for the USA, see the Foreign Sovereign Immunities Act 1976, § 1605(a)(1). But submission to the jurisdiction has been held not to involve submission in later proceedings which, though connected with the earlier proceedings, are distinct from them: Duff Development Co v Kelantan Government [1924] AC 797; cf Sultan of Johore v Abubakar [1952] AC 318.

36  See eg Proyecfin de Venezuela SA v Banco Industrial de Venezuela, AJ, 79 (1985), p 1059. Under the State Immunity Act 1978, s 2(2), a provision in an agreement that it is to be governed by the law of the UK is not regarded as a submission to the jurisdiction. In South Eastern Leasing Corpn v Stern Dragger Belogorsk, ILM, 13 (1974), p 444, a US court held that no waiver in respect of vessels was involved in agreeing by treaty that vessels would enter US ports ‘subject to applicable laws and regulations of the United States’. In First Fidelity Bank NA v Government of Antigua and Barbuda, AJ, 84 (1990), p 560, a waiver by an ambassador was set aside.

Under the former law of the UK agreeing in a contract to accept the jurisdiction of the English courts did not amount to a submission to the jurisdiction: Kahan v Pakistan Federation [1951] 2 KB 1003. See generally on waiver of sovereign immunity under the former law of the UK, Cohn, BY, 34 (1958), pp 260–73. US courts have taken the view that a waiver of immunity by prior contract to submit to the jurisdiction was ineffective where the State Department had suggested the grant of immunity: Isbrandtsen Tankers Inc v President of India, AJ, 66 (1972), p 396. The Foreign Sovereign Immunities Act 1976 distinguishes, in relation to attachment of or execution on assets, between pre-judgment attachment, for which the waiver must be ‘explicit’, and attachment in execution of a judgment, which can be explicit or by implication. The Act does not specify the circumstances which constitute an explicit waiver of immunity; the matter is for decision on the facts of each particular case. See the decision of the Court of Appeals, 2d Circuit, in Libra Bank Ltd v Banco Nacional de Costa Rica, ILM, 21 (1982), p 618; Banque Compafina v Banco de Guatemala, ILM, 23 (1984), p 782.

While a treaty provision may be sufficient to imply a waiver from pre-judgment attachment of assets, it may not be sufficient to meet the statutory requirement that such waiver be ‘explicit’: see Reading and Bates Corpn v National Iranian Oil Co, ILM, 18(1979), p 1398 (on which see Jones, Harv ILJ, 21 (1980), pp 549–52); Chicago Bridge & Iron Co v Islamic Republic of Iran, ILM, 19 (1980), p 1436; New England Merchants National Bank v Iran Power Generation and Transmission Co, ILM, 19 (1980), p 1298; S & S Machinery Co v Masinexportimport, AJ, 77 (1983), p 880; O’Connell Machinery Co v MV Americana, AJ, 78 (1984), p 897; Colonial Bank v Compagnie Gén’erale Maritime et Financière, AJ, 81 (1987), p 422. Cf Behring International Inc v Imperial Iranian Air Force, ILM, 18 (1979), pp 1370, 1389; American International Group Inc v Islamic Republic of Iran, AJ, 75 (1981), p 371; Harris Corpn v National Iranian Radio and Television, ILM, 22 (1983), p 434; Ferrostaal Metals Corpn v SS Lash Pacifico, AJ, 81 (1987), p 665. Merely entering into a treaty dealing with the same subject matter as the claim does not constitute an implied waiver: see Frolova v USSR, AJ, 79 (1985), p 1057; cf von Dardel v USSR, AJ, 80 (1986), p 177.

37  See decisions of US courts in Ipitrade International SA v Federal Republic of Nigeria, ILM, 17 (1978), p 1395; Libyan American Oil Co v Socialist People’s Libyan Arab Jamahirya (1980), ILR, 62, p 220 (see also the amicus curiae brief for the US in the appeal against this decision, at ILM, 20 (1981), p 161: in the event the appeal did not proceed to judgment); Birch Shipping Corpn v Embassy of Tanzania, AJ, 75 (1981), p 373; Liberian Eastern Timber Corpn v Government of the Republic of Liberia, ILM, 26 (1987), p 695 (implying waiver in respect of registration and enforcement of the award, and denying it in respect of execution), and see Joyce, Harv ILJ, 29 (1988), pp 135–41. Certain aspects of the operation of the US Foreign Sovereign Immunities Act in relation to the consequences of a submission by a foreign state to arbitration were clarified by amendments adopted in 1988: see ILM, 28 (1989), p 396, and Kahale, Journal of International Arbitration, 6 (1989), No 2, pp 57–64.

See also the decision of a Swedish court in Libyan American Oil Co v Socialist People’s Arab Republic of Libya, ILM, 20 (1981), p 893; and of an arbitration applying Swiss law, in Westland Helicopters Ltd v Arab Organisation for Industrialisation, ILM, 23 (1984), pp 1071, 1089, annulled by Swiss courts on the ground that a state has not expressly waived its immunity as a result of an arbitration agreement concluded by a separate international organisation of which it is a member: ILM, 28 (1989), pp 687, 691. Cf Maritime International Nominees Establishment v Republic of Guinea, ILM, 21 (1982), p 1355; ILM 22 (1983), p 86; and Senegal v Seutin, ILM, 29 (1990), p 1341, allowing immunity from enforcement of an ICSID award unless assets on which the award is to be enforced are held by the state for commercial purposes. See also the decision of the Paris Court of Appeals setting aside an arbitral award against Egypt (ILM, 22 (1983), p 752) on the ground that, on the facts, Egypt’s association with the arbitration agreement did not make Egypt a party to it so as thereby to have waived its immunity: Arab Republic of Egypt v Southern Pacific Properties (Middle East) Ltd, ILM, 23 (1984), p 1048 (and see comment by Scibelli, Harv ILJ, 26 (1985), pp 263–71) and ILM, 26 (1987), p 1004; and cf, holding Egypt a party to the arbitration agreement, the decision of the District Court, Amsterdam, in Southern Pacific Properties (Middle East) Ltd v Arab Republic of Egypt, ILM, 24 (1985), p 1040.

See generally Oparil, Journal of International Arbitration, 3 (1986), No 4, pp 61–80; Fox, ICLQ, 37 (1988), pp 1, 10–18; Chukwumerije, Anglo-American Law Review, 19 (1990), pp 166–82. See also Art 19 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property as regards the effect of a state entering into an arbitration agreement: YBILC (1986), ii, pt 2, p 8. It may be noted that Art 55 of the Convention establishing the International Centre for the Settlement of Investment Disputes 1965 leaves questions of sovereign immunity in respect of the enforcement of awards under the Convention to the law of the state being asked to enforce the award.

38  What acts constitute a waiver of immunity by implication depends upon the law of the state in which the proceedings are brought. In the UK only circumstances specified in the State Immunity Act 1978 as giving rise to no immunity can be regarded as involving an implied waiver, since by s 1 a state enjoys immunity except only as provided in the Act. By virtue of Art 15 the European Convention on State Immunity 1972 has a similar effect. In the USA s 1605(a)(1) of the Foreign Sovereign Immunities Act 1976 gives no indication of the circumstances which constitute waiver by implication. In some countries the assertion of jurisdiction over foreign states in respect of acts iure gestionis (see § 110) has been supported by implying a waiver of immunity from the circumstance that the foreign state has engaged in such activities: see eg Storelli v French Republic, AD, 2 (1923–24), No 66; Borg v Caisse Nationale d’Epargne Française, AD, 3 (1925–26), No 122.

39  See European Convention on State Immunity 1972, Art 1.1; Art 9 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8); and for the UK, the State Immunity Act 1978, s 2(3). See also Sultan of Johore v Abubakar [1952] AC 318, and other cases cited at n 44. The making of a counter-claim by a state will involve a waiver of immunity not only with respect to the counter-claim but also to the principal claim: European Convention, Arts 1.1, 1.3 and 3.1.

40  European Convention on State Immunity 1972, Art 3.1; Art 9 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property; and for the UK, the State Immunity Act 1978, s 2(3)(b). But where a state did not have knowledge of facts on which a claim to immunity could be based until after taking steps relating to the merits, it can later claim immunity based on those facts if it does so without delay: Art 3(1) of the European Convention, and s 2(5) of the State Immunity Act 1978. See also Baccus SRL v Servicio Nacional del Trigo [1957] 1 QB 438, holding that entering an unconditional appearance and issuing a summons for an order to give security for costs, when this was done without full knowledge of the legal consequences and without the full authority of the sovereign, did not involve an implied waiver of immunity. See also Canadian Overseas Ores Ltd v Compania de Acero del Pacifico SA, AJ, 78 (1984), p 905; Foremost-McKesson Inc v Islamic Republic of Iran, AJ, 84 (1990), p 922.

41  European Convention on State Immunity 1972, Art 15; and for the UK, State Immunity Act 1978, s 1(2). See also Art 9.3 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8), providing that failure by a state to enter an appearance shall not be considered as consent to the exercise of jurisdiction against it; and Art 25, as to default judgments against a state. Note however, in a different sense, the circular of 20 December 1973 issued by the Federal German Ministry of Foreign Affairs, ILM, 13 (1974), p 217.

42  European Convention on State Immunity 1972, Arts 3.2 and 13; Art 9.2 of the ILC’s draft articles, and also Art 14.2, loc cit in n 41; and for the UK, the State Immunity Act 1978, s 2(4). See also para 4 of the Circular issued by the Federal German Ministry of Foreign Affairs, cited in note 41 above.

43  Thus, for instance, courts have granted against a foreign state an order for security for costs (Republic of Costa Rica v Erlanger (1876) 3 ChD 62), an order for payment of costs (Queen of Holland v Drukker [1928] Ch 877) and an order for discovery (Prioleau v United States of America (1866) LR 2 Eq 659; Republic of Peru v Weguelin (1875) LR 20 Eq 140).

It has been held by an American court that litigation concerning the immunity of a vessel owned by a foreign state with which diplomatic relations have been broken off is suspended: Dade Drydock Corp v M/T Mar Caribe (1961), ILR, 32, p 70. An American court has also held that the existence of a state of war does not deprive the opposing belligerent of the jurisdictional immunities to which it is otherwise entitled under international law. See Telkes v Hungarian National Museum (No 2), AD (1941–42), No 169. See for comments thereon Corn LQ, 29 (1944), pp 390–400.

44  European Convention on State Immunity 1972, Art 1.2; Art 10 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8). As to the UK, see the State Immunity Act 1978, s 2(6). See also South African Republic v La Compagnie Franco-Belge [1898] 1 Ch 90; High Commissioner for India v Ghosh [1960] 1 QB 134.

Even in a strictly related counter-claim the defendant has been held unable to recover any excess over the amount for which he is being sued by the foreign state (USSR v Belaiew (1925) 42 TLR 21); but cf Et Ve Balik Kurumu v BNS International Sales Corpn (1960), ILR, 31, p 247. See also United States v National City Bank of New York, AD, 8 (1935–37), No 82. As to the limits of set-off, see United States v New York Trust Co, AD, 13 (1946), No 12. As to counter-claims, see Belgium v EAG de Badtts, AD, 1 (1919–22), No 85; Republic of China v Pang Tsu Mow (1950) 105 F Suppl 411; National City Bank v Republic of China (1955), 348 US 356; First National City Bank v Banco para el Comercio Exterior de Cuba (1983), 103 S Ct 2591, ILM, 22 (1983), p 840; Ministry of Supply, Cairo v Universe Tankships Inc, AJ, 78 (1984), p 232; Islamic Republic of Iran v Boeing Co, AJ, 80 (1986), p 347. By instituting proceedings before one tribunal a state does not on the analogy of a counter-claim lay itself open to proceedings arising out of the same circumstances before another tribunal: see Dessaulles v Republic of Poland, AD, 12 (1943–45), No 24; Mehr v Republic of China, AJ, 50 (1956), p 964; Republic of Iraq v First National City Trust Co (1963), ILR, 34, p 81.

45  See eg National City Bank v Republic of China, ILR, 22 (1955), p 210, in which the US Supreme Court allowed a counter-claim arising out of circumstances largely separate from those raised by the foreign state’s original institution of proceedings; for comment see Looper, AJ, 50 (1956), pp 647–53, and in ICLQ, 5 (1956), pp 276–82; see also Wacker v Bisson (1965) ILR, 42, p 244 (waiver extends to separate action to seek review of extradition proceedings initiated by the foreign state); Banco Nacional de Cuba v First National City Bank of New York, ILM, 12 (1973), p 636 (on which see also § 112, n 22).

The European Convention on State Immunity 1972, Art 1.2, appears to allow a counter-claim which does not arise out of the circumstances of the principal claim if it concerns a matter in respect of which, under the Convention, the foreign state would not have been entitled to immunity if sued in separate proceedings.

46  See eg, as to the UK, State Immunity Act 1978, s 2(6).

It has also been held that jurisdictional immunity does not prevent statutes of limitation from running against foreign states: Guaranty Trust Company of New York v United States (1938) 304 US 126; AJ, 32 (1938), p 848; AD (1938–40), No 69. See also Federal Motorship Corpn v Johnson and Higgins (1948) 77 NYS (2d) 52; AD (1948), No 39.

It has sometimes been asserted that a foreign state does not enjoy immunity in respect of acts in clear violation of international law. In relation to property taken in violation of international law, and subsequently in the USA in connection with the state’s commercial activities, the lack of immunity is prescribed by the Foreign Sovereign Immunities Act 1976 of the USA; and see Kalamazoo Spice Extraction Co v Provisional Military Government of Socialist Ethiopia, ILM, 24 (1985), p 1277; Alberti v Empresa Nicaraguense de la Carne, ILM, 22 (1983), p 835; De Sanchez v Banco Central de Nicaragua, AJ, 80 (1986), p 658; West v Multibanco Comermex, AJ, 81 (1987), p 660. More widely, the US Supreme Court has held that the Alien Tort Claims Act (enacted in 1789), which gives US courts jurisdiction over civil actions ‘by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States’, does not give jurisdiction over a foreign state, the exclusive basis for which lies on the Foreign Sovereign Immunities Act: Argentine Republic v Amerada Hess Shipping Corpn (1989), ILR, 81, p 658 (see Janney, Harv ILJ, 31 (1990), pp 368–76 and, on earlier stages of this case, Montgomery, Harv ILJ, 29 (1988), pp 215–22); Kirgis, AJ, 82 (1982), pp 323–30. See generally on the Alien Tort Claims Act at § 19, n 93.

See § 109, n 28.

See the European Convention on State Immunity 1972, Art 9; Art 14.1 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8); and, for the UK, the State Immunity Act 1978, s 6(1). Note also the remarks of Lord Simon in delivering the advice of the Judicial Committee of the Privy Council in Sultan of Johore v Abubakar [1952] AC 318, 342–4. See also Foreign State (Legation Buildings) Immunities Case, AD, 4 (1927–28), No 113; Limbin Hteik Tin Lat v Union of Burma (1954), ILR, 32, p 124. For a survey of earlier cases see Fairman, AJ, 22 (1928), pp 567–8. See also the two judgments of the Supreme Court of Czechoslovakia of April 1928 and December 1929, as reported in AD, 4 (1927–28), Nos 111 and 251. See, as to the first, Deák, AJ, 23 (1929), pp 582–94, and Bosco, Rivista, 21 (1929), p 48. See also Halig Ltd v Polish State, for a refusal to entertain an action brought by a landlord against the Polish State because of the exhibition of the insignia of Poland: AD, 4 (1927–28), No 104. See Riccio v Little concerning the British cemetery in Naples owned by the British Government: it was held that Italian courts had no jurisdiction to entertain an action brought against the persons administering the cemetery on behalf of the British authorities: AD, 7 (1933–34), No 68. See also Rossignol v State of Czechoslovakia, ILR, 16 (1949), No 40, and Robine v Consul of Great Britain, ILR, 17 (1950), No 38, for the grant of immunity by French courts in proceedings relating to real property; and similarly Mahe v Agent Judiciaire du Trésor Français (1965), ILR, 40, p 80; Municipality of the City and County of St John, Logan and Clayton v Fraser-Brace Corpn, ILR, 26 (1958-II), p 165.

For denial of immunity in proceedings relating to diplomatic premises where no interference with the mission’s functions would result, see Jurisdiction over Yugoslav Military Mission (Germany) Case (1962), ILR, 38, p 162; and in proceedings in respect of state-owned premises which were, but had permanently ceased to be, diplomatic premises, see Tietz v People’s Republic of Bulgaria (1959), ILR, 28, p 369; Weinmann v Republic of Latvia (1959), ibid, p 385; Westminster City Council v Government of the Islamic Republic of Iran [1986] 1 WLR 979; and see § 494, nn 7, 33 and 34.

See § 109, n 29.

But note that in Victory Transport Inc v Comisaria General de Abastecimientos y Transportes (1964), ILR, 35, p 110, public loans were included in the list of acts considered to be acts iure imperii. But cf Carl Marks & Co v Union of Soviet Socialist Republics, AJ, 82 (1988), p 129. Public loans are not as such a matter in respect of which courts have jurisdiction by virtue of the European Convention on State Immunity 1972. The cancellation of bonds by a state has been held to be an act iure imperii: Brasseur v Republic of Greece, AD, 6 (1931–32), No 85.

The House of Lords has held that a British Government loan contracted in the USA was, in the circumstances of the case, governed by subsequent US legislation. It declined to accede to the view, approved by the Court of Appeal, that, as states are sovereign, loans contracted by them abroad must invariably be governed by their own law: R v International Trustee for the Protection of Bondholders Aktiengesellschaft [1937] AC 500; AD, 8 (1935–37), No 6. This decision is not wholly inconsistent with the judgment of the PCIJ in the Serbian and Brazilian Loans Cases, PCIJ Series A, Nos 20, 21; AD, 5 (1929–30), No 278. The decisions of the Supreme Courts of Sweden and Norway, given in 1937, equally denied that such governmental contracts were immune from the legislation of the state where the contract was made. See AD, 8 (1935–37), Nos 7 and 8 respectively. These, and similar, cases arose in connection with the Joint Resolution of the US Congress which declared any provision requiring payment in gold or in a particular kind of coin or currency to be contrary to public policy. See Plesch, The Gold Clause (1936); Domke, Clunet, 63 (1936), pp 547ff; Bagge, RI, 64 (1937), pp 791, 816; Jèze, Hag R, 7 (1925), p 174. See also on the law governing state contracts Mann, BY, 21 (1944), pp 11–33, and in BY, 35 (1959), pp 34–57; Lalive, ICLQ, 13 (1964), pp 987–1021; Ramazani, ICLQ, 11 (1962), pp 503–18; Jennings, BY, 37 (1961), pp 156–82. See also § 12, n 12. See also Nussbaum, Money in the Law (2nd ed, 1950), pp 414–45, and Mann, The Legal Aspects of Money (4th ed, 1982), pp 140–56, for an examination of the international aspects of gold clauses.

See § 565. The European Convention on State Immunity 1972 does not apply to proceedings in respect of the operation of seagoing vessels owned or operated by a state: Art 30. For the UK s 10 of the State Immunity Act 1978 allows an action in rem against a ship belonging to a foreign state, or an action in personam for enforcing a claim in connection with such a ship, if at the time the cause of action arose the ship was in use or intended for use for commercial purposes.

On the other hand, the ILC’s draft Articles on Jurisdictional Immunities of States and their Property (YBILC (1986), ii, pt 2, p 8), do contain provisions governing this matter, in effect excluding immunity in proceedings relating to the operation of state-owned and state-operated ships used for commercial purposes, or relating to the carriage of cargo on board such ships: Art 18.

Thus s 1605(a)(5) of the US Foreign Sovereign Immunities Act denies immunity in cases in which damages are sought against a foreign state for personal injury or death occurring in the USA and caused by the tortious act or omission of the foreign state or its officials. See Liu v Republic of China, ILM, 29 (1990), p 192. See also, for the UK, s 5 of the State Immunity Act 1978; European Convention on State Immunity 1972, Art 11; ILC’s draft Articles on State Immunity (1986), Art 13.

See in particular Fox, AJ, 35 (1941), pp 632–40; Fensterwald, Harv Law Rev, 63 (1950), pp 614–42; Fawcett, BY, 25 (1948), pp 34–51; Sucharitkul, State Immunities and Trading Activities in International Law (1959); Dunbar, Hag R, 132 (1971), i, pp 205–29; Crawford, BY, 54 (1983), pp 75–118; Fox in International Economic Law and Developing States (ed Fox, 1988), pp 63–78. See also the survey of the position in various countries by H Lauterpacht, BY, 28 (1951), pp 250–72. The ‘Tate letter’ (n 9) refers to the practice of 28 states. See also the literature referred to at § 109, nn 2 and 20, much of which treats of this distinction. The abandonment of immunity in respect of acts of a non-public nature was advocated by the International Law Association in 1952 (see ILA Report of the 45th Conference (1952), pp 210–32), again in 1982 (ILA Report of the 60th Conference (1982), pp 5–10, 325ff.) and by the Institut de Droit International in 1954 (see Annuaire, 45, ii (1954), pp 200–27). As to the relationship between acts of a commercial character (and the absence of immunity in respect of them) and the needs of states to secure their economic development, see Delaume, AJ, 79 (1985), pp 319–46.

In 1952, in the so-called ‘Tate letter’, the Department of State of the US announced, as a matter of its future policy, that it would no longer favour claims to immunity on the part of foreign governments in respect of their commercial transactions: for the text see Whiteman, Digest, 6, pp 569–71. See Bishop in AJ, 47 (1953), pp 93–106, and Drachster, AJ, 54 (1960), pp 790–800. Thereafter, if asked to provide for use in court a ‘suggestion’ of immunity (as to which practice, and the binding character of the suggestion, see § 460) the State Department acted in accordance with the policy laid down in the Tate letter. If no request to the State Department for a ‘suggestion’ of immunity was made by the parties the courts decided for themselves whether the foreign state was entitled to immunity, and in several cases held that the foreign state was not entitled to immunity when engaged in an essentially commercial activity: Victory Transport Inc v Comisaria General de Abastecimientos y Transportes (1964), ILR, 35, p 110; Ocean Transport Co v Government of the Republic of Ivory Coast, AJ, 62 (1968), p 197.

The matter is now regulated by statute, s 1605(a)(2) of the Foreign Sovereign Immunities Act 1976 providing that a foreign state is not immune in any case ‘in which the action is based upon a commercial activity carried on in the United States by the foreign State; or upon an act performed in the United States in connection with a commercial activity of the foreign State elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign State elsewhere and that act causes a direct effect in the United States’. After the entry into force of the Act the State Department discontinued the practice of making ‘suggestions’ of immunity, the matter being henceforth for decision by the courts on the basis of the Act. In applying the ‘commercial activity’ test US courts look to the nature of the course of conduct or particular transaction, not to its purpose.

For application of s 1605(a)(2), as to the nature of commercial activity, see eg National American Corpn v Federal Republic of Nigeria, ILM, 17 (1978), p 140, and Texas Trading & Milling Corpn v Federal Republic of Nigeria, ILM, 20 (1981), p 620 (purchase of cement, even if for purposes connected with the armed forces, not subject to immunity); International Association of Machinists and Aerospace Workers v OPEC (1979) 477 F Supp 553 (noted by Crocker, ICLQ, 29 (1980), pp 508–10), AJ, 76 (1982), p 160 (price-fixing by states as part of their economic policies a commercial activity); American International Group Inc v Islamic Republic of Iran, AJ, 75 (1981), p 371 (state insurance monopoly is engaged in commercial activity: immunity denied); De Sanchez v Banco Central de Nicaragua, AJ, 80 (1986), p 658 (cheque issued, and later repudiated, by Central Bank as part of its governmental function justifies immunity); Ministry of Supply, Cairo v Universe Tankships Inc, AJ, 78 (1984), p 232 (act abroad of foreign state, if integral part of its commercial transactions in the forum state, does not enjoy immunity); Transamerican Steamship Corpn v Somali Democratic Republic, AJ, 76 (1986), p 357 (state’s active assistance to an agency in its commercial activities is itself a commercial activity for which it does not enjoy immunity); Gemini Shipping Inc v Foreign Trade Organisation for Chemicals and Foodstuffs, ILM, 20 (1981), p 650 (guarantees by state agencies, which are ‘part and parcel’ of purchase by them of rice, are a commercial activity); Velidor v L/P/G Benghazi, ILM, 21 (1982), p 621 (claim for wages by seamen on vessel, owned by foreign state agency, calling at US ports in pursuit of commercial activity does not attract immunity); Callejo v Bancomer SA, ILM, 24 (1985), p 1050 (commercial banking services not entitled to immunity); West v Multibanco Comermex, AJ, 81 (1987), p 660 (dealings in certificates of deposit are a commercial activity); Practical Concepts Inc v Republic of Bolivia, AJ, 81 (1987), p 952 (commercial nature of contract determined by its central, not its auxiliary, provisions); Carl Marks & Co v Union of Soviet Socialist Republics, AJ, 82 (1988), p 129 (issuance of bonds by a government constitutes a commercial activity, but also holding that the Act did not operate retroactively so as to allow proceedings in respect of a commercial activity undertaken when the rule of absolute immunity prevailed). See also Colonial Bank v Compagnie Générale Maritime et Financière, AJ, 81 (1987), p 422. See also literature cited at § 109, n 11. As to the assertion of ‘long arm’ jurisdiction in this provision, concerning acts abroad having a ‘direct effect’ in the USA, see § 139, n 42.

10  This was so in particular with regard to foreign public vessels engaged in commerce. In The Cristina [1938] AC 485 the majority of the House of Lords expressed views not favourable to immunity from jurisdiction in such cases. See also the observations, on the latter case, of Evershed MR in the Dollfus Mieg Case [1950] 1 Ch 333 and Lord Simon in Sultan of Johore v Abubakar [1952] AC 318. In delivering the Opinion of the Judicial Committee of the Privy Council in Sultan of Johore v Abubakar (above) Lord Simon attached importance to dispelling the view that there exists ‘any absolute rule that a foreign independent sovereign cannot be impleaded in our courts in any circumstances’; similarly Lord Denning in Rahimtoola v Nizam of Hyderabad [1958] AC 379, 415, and in Thai-Europe Tapioca Service Ltd v Government of Pakistan [1975] 3 All ER 961 (but the decision in that case continued the rule of absolute immunity in proceedings in personam). And see Civil Air Transport Incorporated v Central Air Transport Corpn [1952] 2 All ER 733, where an Order in Council was issued to the effect that the plea of immunity shall not constitute a bar to the jurisdiction of the court. See ‘Aristeides’, ILQ, 3 (1950), pp 159–177, and the comment by Johnson, BY, 29 (1952), pp 464–70. For a summary of British judicial criticisms of the rule of absolute immunity see Sinclair, ICLQ, 22 (1973), at pp 255–61. In 1975 the Privy Council adopted the restrictive view of sovereign immunity as regards proceedings in rem against vessel owned by a foreign state but not in its possession at the relevant times: The Philippine Admiral [1976] 1 All ER 78. In Trendtex Trading Corpn v Central Bank of Nigeria [1977] 1 All ER 881 the Court of Appeal was prepared to apply the restrictive view of sovereign immunity to other types of proceedings. For comment on these two cases see White, ICLQ, 26 (1977), pp 674–80; Markensinis, Camb LJ, 36 (1977), pp 211–16; Higgins, AJ, 71 (1977), pp 423–37; Crawford, BY, 47 (1974–75), pp 365–9, and 48 (1976–77), pp 353–62; Johnson, Aust YBIL, 6 (1974–75), pp 1–51. See also The Uganda Co (Holdings) Ltd v Government of Uganda [1979] 1 Lloyd’s Rep 481 (with comment by Crawford, BY, 50 (1979), pp 218–21; Higgins, AJ, 73 (1979), pp 465–70); Planmount Ltd v Republic of Zaire [1981] 1 All ER 1110; I Congreso del Partido [1983] 1 AC 244, confirming the decisions in The Philippine Admiral and Trendtex Trading Corpn v Central Bank of Nigeria (above) as to the position at common law; although decided by the House of Lords after the entry into force of the State Immunity Act 1978, the case involved proceedings begun, and thus the position at common law, prior to the Act (for comment see Crawford, BY, 52 (1981), pp 314–19; Fox, LQR, 98 (1982), pp 94–108; Mann, ICLQ, 31 (1982), pp 573–5).

11  The Act was based on the European Convention on State Immunity 1972, and its enactment enabled the UK to ratify the Convention. The Act entered into force on 22 November 1978, in accordance with s 23(5). It does not apply to proceedings in respect of matters occurring before that date: s 23(3).

The Act, in ss 2–11, lists various exceptions to the general immunity from jurisdiction enjoyed by foreign states, covering — submission to the jurisdiction; commercial transactions and contracts to be performed in the UK; contracts of employment; personal injuries and damage to property; ownership, possession and use of property; patents, trade marks, etc; membership of bodies corporate, etc; arbitrations; ships used for commercial purposes; and value added tax, customs duties, etc. The basic ‘commercial activity’ exception is in s 3(1), providing: ‘A State is not immune as respects proceedings relating to — (a) a commercial transaction entered into by the State; or (b) an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom.’ The term ‘commercial transaction’ is defined in s 3(3). Note an important series of judgments in the English courts in 1987–89 in which creditors of the International Tin Council sued the UK and the 22 other member states of the Council in respect of debts owed by the Council. The claim by the member states (other than the UK) to sovereign immunity (notwithstanding the Council’s quasi-commercial role in managing the international tin market) did not have to be decided at the highest level since the House of Lords held the Council to have separate legal personality and to be, alone, liable on its contracts: see Maclaime Watson & Co Ltd v Department of Trade and Industry [1989] 3 All ER 523. See also § 7, n 21.

12  For summaries of the position in a number of states, see Neth YBIL, 10 (1979), pp 35–289; Sinclair, Hag R, 167 (1980), ii, pp 121–34, 146–96; UN Legislative Series, Materials on Jurisdictional Immunities of States and the Property (ST/LEG/SERIES B/20) (1982); Lewis, State and Diplomatic Immunities (2nd ed, 1985), pp 138–56. See also n 8. The Commission of the European Communities has subscribed to the restrictive rule of immunity: Re Aluminium Imports from Eastern Europe [1987] 3 CMLR 813, 875–6.

13  Italian courts have for long refused to grant immunity to foreign states in respect of their acts iure gestionis, and there have been many decisions to that effect, amongst which see Storelli v French Republic, AD, 2 (1923–24), No 66; Perrucchetti v Puig y Cassaro, AD, 4 (1927–28), No 247; De Semenoff v Railway Administration of the Norwegian State, AD, 8 (1935–37), No 92; Government of Bolivia v Italian Association for Aeronautical Exports, AD, 15 (1948), No 41; La Mercantile v Kingdom of Greece, ILR, 22 (1955), p 240; Hungarian People’s Republic v Onori, ILR, 23 (1956), p 203; Hungarian Papal Institute v Hungarian Institute (Academy) in Rome (1960), ILR, 40, p 59.

14  As in Italy, Belgian courts have for a long time drawn a distinction between acts iure imperii and those iure gestionis, denying immunity in respect of the latter. Among the many decisions to that effect see Soc Monnoyer et Bernard v France, AD, 4 (1927–28), No 112; Brasseur v Republic of Greece, AD, 6 (1931–32), No 85; SA ‘Dhlellemes et Masurel’ v Banque Centrale de la République de Turquie (1963), ILR, 45, p 85.

15  See generally Suy, ZöV, 27 (1967), pp 660–92. See also Collision with Foreign Government-owned Motor Car (Austria) Case (1960), ILR, 40, p 73 (with comment by Abel, ICLQ, 11(1962), pp 840–3); Dralle v Czechoslovakia, ILR, 17 (1950), No 41 (with comment by Abel, AJ, 45 (1951), pp 354–7).

16  See Brinton, The Mixed Courts of Egypt (revised ed, 1968), ch 12 (as to the position in the Mixed Courts); Borg v Caisse Nationale d’Epargne Française, AD, 2 (1925–26), No 122; Monopole des Tabacs de Turquie v Régie Co-Intéressée des Tabacs de Turquie, AD, 5 (1929–30), No 79; Egypt Delta Rice Mills Co v Comisaria General de Abastecimientos y Transportes de Madrid, AD, 12 (1943–45), No 27; Federated People’s Republic of Yugoslavia v Kafr El-Zayat Cotton Co, ILR, 18 (1951), No 54.

17  Eg State Immunity (Switzerland) (No 2) Case, AD, 10 (1941–42), No 62; UAR v Dame X, AJ, 55 (1961), p 167; Arab Republic of Egypt v Cinetelevision International Registered Trust (1965), ILR, 65, p 425.

18  Eg Re Danish State Railways in Germany, ILR, 20 (1953), p 178; decisions of the Federal Constitutional Court, 1962–63, referred to in AJ, 59 (1965), p 653, including Claim Against the Empire of Iran Case (1963), ILR, 45, p 57 (and see Mann, MLR, 27(1964), pp 81–3); Nonresident Petitioner v Central Bank of Nigeria, ILM, 16 (1977), p 501; and the circular issued by the Ministry of Foreign Affairs in 1973, ILM, 13 (1974), p 217. See also Schaumann and Habscheid, Die Immunität ausländischer Staaten nach Völkerrecht und deutschen Zivilprozessrecht (1968); Domke, AJ, 48 (1954), pp 302–4. As to earlier position in Germany see Liszt, § 13(iv), and Krückmann in Zeitschrift für Ostrecht, i (1927), pp 161–92. See also The Visurgis and The Siena, AD, 9 (1938–40), No 94.

19  Eg Etat Roumain v Pascalet, AD, 2 (1923–24), p 132; Soc Immobilière des Cités Fleuries Lafayette v United States of America (1960), ILR, 42, p 123; Soc Bauer-Marchal et Cie v Gouvernement Turc (1965), ILR, 47, p 155; Administrations des Chemins de Fer Iraniens v Soc Levant Express Transport, RG, 73 (1969), p 883.

20  Eg De Froe v The Russian State, AD 6 (1931–32), No 87; Krol v Bank Indonesia, ILR, 26 (1958-II), p 180; Soc Europénnes d’Etudes et d’Entreprises v Yugoslavia (1973), ILM, 14 (1975), p 71, ILM, 24 (1985), pp 345, 348–9.

21  State Immunity Act 1982; ILM, 21 (1982), p 798. As to the earlier law, which applied the rule of absolute immunity, see Kos-Rabcewicz-Zubkowski, Can YBIL, 6 (1968), pp 242–51, as to decisions in courts in Quebec. In Flota Maritima Browning de Cuba SA v SS Canadia Conqueror (AJ, 57 (1963), p 440) the Canadian Supreme Court left the matter open, although leaning towards a restrictive approach to sovereign immunity. That Court’s decision in Le Gouvernement de la République Democratique du Congo v Venne (1972) 22 DLR (3d) 669 is similarly inconclusive: see Castel, Can YBIL, 9 (1971), pp 159–72. But the restrictive rule was adopted in Zodiak International Products Inc v Polish People’s Republic [1977] 81 DLR 656.

22  Foreign States Immunities Act 1985, s 11; ILM, 25 (1986), p 715.

23  See Qureshi v USSR, ILM, 20 (1981), p 1060; State Immunity Ordinance 1981, s 5.

24  As to the USSR, see Boguslavsky, Neth YBIL, 10 (1979), pp 167–77. While India still applies the rule of absolute immunity, the trend is towards the restrictive rule: see Agrawala in Essays on International Law (ed Nawaz, 1976), pp 314–36; United Arab Republic v Mirza All Akbar Kashani (1961), ILR, 64, p 394, and on appeal (1965), ibid, p 489; German Democratic Republic v The Dynamic Industrial Undertaking Ltd (1970), ibid, p 504; Union of India v Chinoy Chablani and Co (1976), ibid, pp 534, 537.

25  See § 109, n 8.

26  See § 109, n 35ff.; see also this §, n 2, as to the administration of trust property or the estate of a bankrupt, in which a foreign state has an interest.

27  YBILC (1986), ii, pt 2, p 8. See also Art III of the draft Articles for a Convention on State Immunity, adopted by the International Law Association at its 60th Conference (1982), reprinted in ILM, 22 (1983), p 287; and Art 5 of the Inter-American Draft Convention on Jurisdictional Immunity of States, adopted by the Inter-American Juridical Committee in 1983: ibid, p 292.

28  See eg De Decker v USA (1956), ILR, 23, p 209; State Bank of India v Chicago Joint Board, Amalgamated Clothing and Textile Workers Union, ILM, 16 (1977), p 853; Sengupta v Republic of India [1983] ICR 221, BY, 54 (1983), p 279.

29  The analogous provision of the US Foreign Sovereign Immunities Act 1976, excluding immunity where money damages are sought against a foreign state for personal injury or death, or damages to or loss of property, occurring in the US and caused by the tortious act of the state or its officials acting within the scope of their office or employment, has been held to exclude immunity where the foreign state is sued for damages resulting from an alleged political assassination in the US by agents of the defendant state: Letelier v Republic of Chile, ILM, 19 (1980), pp 409, 1418 (on which see Petri, Harv ILJ, 21 (1980), pp 793–8). See also Gerritsen v de la Madrid, AJ, 71 (1987), p 947. The same provision was held not to exclude immunity in respect of damage occurring in a foreign state’s territorial waters: Perez v The Bahamas, AJ, 76 (1982), p 173.

30  Purchase of goods to be resold to nationals was held by one French court to be an act jure gestionis (Roumania (State of) v Pascalet, AD, 2 (1923–24), No 68), by another to be an act jure imperii (Lakhowsky v Swiss Federal Government, AD, 1 (1919–22), No 83).

Compare Kingdom of Roumania v Guaranty Trust Co of New York (2nd) 250 Fed 341, 343, where the court held that the purchase of shoes for the army constitutes the exercise of the ‘highest sovereign function of protecting itself against the enemies’. An Italian court considered a similar transaction to be an act of a private law nature and, as such, outside the principle of jurisdictional immunity (Governo Rumeno v Trutta, Giurisprudenza Italiana (1926) (1), p 774).

31  There is room for the view that any activity of a state — even if ostensibly of a private law nature — is performed jure imperii as aiming at the welfare of the state. See eg, for this line of reasoning the decision of the Court of Appeal of Bordeaux in Robine v British Consul where the Court declined jurisdiction in an action relating to a lease of consular premises: ILR, 17 (1950), No 38. In Victory Transport Inc v Comisaria General de Abastecimientos y Transportes (1964), ILR, 35, p 110, a US Court of Appeals adopted the view that acts iure imperii were limited to internal administrative acts, such as expulsion of aliens; legislative acts, such as nationalisation; acts concerning the armed forces; acts concerning diplomatic activity; and public loans.

32  Martin v Bank of Spain, ILR, 19 (1952), No 42.

33  Siderman v Republic of Argentina, AJ, 79 (1985), p 1065 (and comment by Diterich, Harv ILJ, 26 (1985), pp 594–600).

34  Alberti v Empresa Nicaraguense de la Carne, ILM, 22 (1983), p 835.

35  Guggenheim v Etat de Vietnam, AJ, 56 (1962), p 1112; cf cases at n 30, as to purchase of shoes for the army.

36  Heaney v Government of Spain and Gomero, AJ, 66 (1972), p 189.

37  Francischiello v Government of the USA (1959), ILR, 28, p 158.

38  Etat Espagnol v SA de l’Hotel George V, RG, 77 (1972), p 592.

39  Aerotrade Inc v Republic of Haiti, ILM, 13 (1974), p 969; the court considered it ‘largely irrelevant’ how the equipment might be used after delivery.

40  Nashashibi v Consul General of France in Jerusalem, ILR, 26 (1958–11), p 190; UAR v Dame X, AJ, 55 (1961), p 167; cf Robine v British Consul, ILR, 17 (1950), No 38. See also Intpro Properties (UK) Ltd v Sauvel [1983] QB 1019 (no immunity in respect of property leased as the private residence of a diplomatic agent). See also Sengupta v Republic of India [1983] ICR 221, BY, 54 (1983), p 279 (contract of employment at a foreign diplomatic mission).

41  Hungarian People’s Republic v Onori, ILR, 23 (1956), p 203.

42  Claim against the Empire of Iran (1963), ILR, 45, p 57 (and see Mann, MLR, 27 (1964), pp 81–3); Planmount Ltd v Republic of Zaire [1981] 1 All ER 1110.

43  Société Européenne d’Etudes et d’Entreprises v Yugoslavia (1973), ILM, 14 (1975), p 71.

44  National American Corpn v Federal Republic of Nigeria and Central Bank of Nigeria, ILM, 16 (1977), p 505 (it being held irrelevant in the circumstances that the contract had been signed by the Minister of Defence) ILM, 17 (1978), p 1407; see also Trendtex Trading Corpn v Central Bank of Nigeria [1977] 1 All ER 881; Non-resident Petitioner v Central Bank of Nigeria, ILM, 16 (1977), p 501.

See §§ 494, 497.

See § 550.

See §§ 556–64. See above § 298, as to wrecks of state ships on the seabed.

See § 568.

See eg as to the former Iranian Embassy premises in London, Westminster City Council v Government of the Islamic Republic of Iran [1986] 1 WLR 979. In 1988 the UK Government took possession of the former Cambodian Embassy premises in London: see the Diplomatic and Consular Premises (Cambodia) Order 1988 (SI 1988 No 30), made under the Diplomatic and Consular Premises (Protection) Act 1987. For an unsuccessful attempt to seek judicial review of that Order, see R v Secretary of State for Foreign and Commonwealth Affairs, ex parte Samuel (1989), ILR, 83, p 232. See also § 494, n 7.

See § 109, n 30.

It is sometimes said that one state may not levy taxation on another state’s property, although it is uncertain whether this is attributable to considerations of the equality and independence of states or to the impropriety of taking any measures of enforcement against a state should it refuse to pay the tax levied. Generally, taxation is not levied on foreign state property devoted to public or governmental purposes, and exemption from taxation on other state property is often granted at least as a matter of courtesy.

In the UK a foreign state is not immune from the jurisdiction of the courts in respect of proceedings relating to its liability for value added tax, any customs or excise duty or agricultural levy, or rates in respect of premises occupied by it for commercial purposes: State Immunity Act 1978, s 11. Such proceedings are, by virtue of s 16(5), the only proceedings relating to taxation to which that Part of the Act applies, with the apparent result that the general rule of immunity prescribed in s 1 is inapplicable to proceedings in relation to liability for other taxes. But note the observations of Dillon LJ in R v Inland Revenue Commissioners, ex parte Camacq Corpn [1990] 1 All ER 173, 189–90.

In Municipality of the City and County of St John, Logan and Clayton v Fraser-Brace Overseas Corpn property held by a Canadian firm on behalf of the US Government for defence purposes was held immune from taxation: ILR, 26 (1958-II), p 165. See also Yin-Tso Hsiung v Toronto, ILR, 17 (1950), No 40, and §§ 505 and 550(5), as to taxation of diplomatic and consular property. Compare Gobierno de Italia en Suc v Consejo Nacional de Educacion, AD, 10 (1941–42), No 52, holding tax exemption to be a matter of courtesy only. Exemption from local real property taxes in respect of immovable property used by a foreign government for commercial purposes was denied in County Board of Arlington v Government of German Democratic Republic, ILM, 17 (1978), p 1402, but reversed on appeal in the light of evidence of non-commercial use (1982), ILR, 72, p 652. See generally Bishop, AJ, 46 (1952), pp 239–58, esp 247–54; Paone, Ital YBIL, 2 (1976), pp 273–84. For an unusual, and unsuccessful, action before the Polish courts against the German Treasury and the City of Berlin for alleged illegal exactions of rates and taxes, see German Immunities in Poland Case, AD (1935–37), No 95. Certain ‘taxes’ are in fact no more than charges for specific services rendered, and there would seem no justification for exemption of foreign states from such charges. For a refusal to grant the State of New York immunity from federal taxes in respect of the state’s activities of a non-governmental character, see New York v United States (1946), and note by Kuhn, AJ, 40 (1946), pp 374–6. See generally Restatement (Third), i, pp 447–52. The European Convention on State Immunity 1972 does not apply to proceedings concerning taxes: Art 29. Article 16 of the ILC’s draft Articles on Jurisdictional Immunities of States and their Property does not permit immunity to be invoked before an otherwise competent court of another state in proceedings which relate to the fiscal obligations for which it may be liable under the law of the state of the forum, such as duties, taxes or other similar charges: YBILC (1986), ii, pt 2, p 8.

See § 109, n 30ff.

See vol II of this work (7th ed).

10  As to action taken by Argentina in relation to British property, including Crown property, at the time of the hostilities between the UK and Argentina over the Falkland Islands in 1982, see Williams and Gooding, Neth IL Rev, 35 (1988), pp 73–9. See also, for economic measures taken against Argentina, UKMIL, BY, 53 (1982), pp 508–16; Acevedo, AJ, 78 (1984), pp 323–44; David, Rev Belge, 18 (1984–85), pp 150–65.

11  As to US action in blocking Iranian Government property in 1979, see the President’s Executive Order 12170 of 14 November 1979, and the consequential regulations: ILM, 18 (1979), p 1549. The Order had the effect of denying Iran the benefit of immunity from pre-judgment attachment which it would otherwise have enjoyed: see New England Merchants National Bank v Iran Power and Generating Co, ILM, 19 (1980), at p 1312ff. See also the Statements of Interest submitted on behalf of the US, following the US-Iran agreement of 1981, in cases where Iranian assets had been attached: ILM, 20 (1981), pp 171, 363. For a series of Executive Orders covering Iranian assets pursuant to the settlement, see ibid pp 282, 286, 412, 414; and Electronic Data Systems Corpn Iran v Social Security Organisation of the Government of Iran, ibid, p 344, questioning their constitutional validity in relation to the consequences of judgments already delivered affecting Iranian assets. See also Dames and Moore v Regan (1981) 453 US 654; Persinger v Iran, ILM, 22 (1983), p 404, and ILM, 23 (1984), p 384. See also § 129, n 14, para 5. For similar measures taken by the UK see Iran (Temporary Powers) Act 1980, and UKMIL, BY, 51 (1980), pp 412–14.

Similarly the USA imposed restraints on Libyan property in 1986: see § 129, n 15, para 3.

12  See generally as to measures of economic coercion against other states, § 129, nn 13, 14.

Assuming that the state and its government have been recognised by the state of the forum: see § 47, nn 8–11. A member state of a federation may be a state for purposes of the act of state doctrine (Carl Zeiss Stiftung v VEB Carl Zeiss (1968–70), ILR, 61, p 35) as may a protected state (Occidental Petroleum Corpn v Buttes Gas & Oil Co (1972), ILR, 57, pp 13, 31; Buttes Gas & Oil Co v Hammer [1981] 3 WLR 787); but not a city council (Re Adoption by McElroy (1975), ILR, 66, p 163).

See, as to the rule generally, The Exchange v McFaddon (1812) 7 Cranch 116, Scott, Cases, 300; Underhill v Hernandez (1897) 168 US 250, 18 Sup Ct 83; Wulfsohn v Russian Socialist Republic (1923) 234 NY 372, 138 NE 24; A M Luther Co v Sagor & Co [1921] 3 KB 532; Russian Commercial and Industrial Bank v Comptoir d’Escompte [1923] 2 KB 630, and Banque Internationale v Goukassow, ibid, p 682 (both reversed, but without affecting the principle stated in the text, [1925] AC 112 and 150); Re Helbert Wagg & Co [1956] Ch 323; Bank Indonesia v Senembah Maatschappij and Twentsche Bank (1959), ILR, 30, p 28; Pons v Republic of Cuba (1961), ILR, 32, p 10; Banco Nacional de Cuba v Sabbatino (1964) 376 US 398; ILR, 35, p 2; Époux Reynolds v Ministre des Affaires Etrangères (1965), ILR, 47, p 53; French v Banco Nacional de Cuba (1968), ILR, 66, p 6; First National City Bank v Banco Nacional de Cuba (1972), ILR, 66, p 102; Hunt v Mobil Oil Corpn (1977), ILR, 66, p 288, review denied, ILM, 16 (1977), p 1376; W S Kirkpatrick & Co Inc v Environmental Tectonics Corpn International, ILM, 29 (1990), p 182.

See generally on the act of state doctrine, Mann, LQR, 59 (1943), pp 42–57 and 155–71 (reprinted in Studies in International Law (1973), pp 420–65); Hag R, 132 (1971), i, pp 107, 145–56; and Foreign Affairs in English Courts (1986), pp 164–90; Zander, AJ, 53 (1959), pp 826–52; Hyde, ibid, pp 635–8; Reeves, AJ, 54 (1960), pp 141–56; Falk in Essays on International Jurisdiction (1961); The Role of Domestic Courts in the International Legal Order (1964), pp 139–45; and Status of Law in International Society (1970), pp 426–42; van Panhuys, ICLQ, 13 (1964), pp 1193–213; Spiro, ICLQ, 16 (1967), pp 145–56; Dicey and Morris, Rule 87; Jacobs, King and Rodriguez, Harv ILJ, 18 (1977), pp 677–97; Meal and Trachtman, ibid, 20 (1979), pp 583, 627–54; Ebenroth and Teitz, Banking on the Act of State (1985); Restatement (Third), i, pp 366–89; Kirgis, AJ, 82 (1988), pp 58–61; and much of the literature cited below, n 21, in connection with the First National City Bank case, and § 113, n 9, in connection with the Sabbatino case.

See also § 378, as to the grant of a state’s nationality; and § 380, as to the creation and dissolution of companies.

Where the act which it is sought to put in question is raised in proceedings against a foreign state’s officials, or against the foreign state itself, the issue will fall to be considered in the light of the applicable rules of sovereign immunity: see §§ 109–10; and Akehurst, BY, 46 (1972–73), pp 145, 240–44. See also § 148 as to the inability of a person accused of a war crime to plead that his acts were those of his state, for which only the state can be held responsible.

See Alfred Dunhill of London Inc v Republic of Cuba (1976), ILR, 66, p 212, denying the applicability of the rule to an act committed by a foreign state in the course of its commercial operations; National American Corpn v Federal Republic of Nigeria, ILM, 17 (1978), p 1407; Timberlane Lumber Co v Bank of America (1976), ILR, 66, p 270. But cf Van Bokkelen and Rohr SA v Grumman Aerospace Corpn (1977), ILR, 66, p 311; International Association of Machinists and Aerospace Workers v OPEC (1981), ILR, 66, p 413. Criminal acts by a Head of State (such as embezzlement) are not acts of the state but are private acts, with the result that the legality of those acts does not have to be accepted without question in extradition proceedings against him after he has ceased to be Head of State: Perez Jiminez v Aristeguieta (1962), ILR, 33, p 353. In such cases the burden of proof is on the Head of State (or former Head of State) to establish that his acts were performed in his public capacity: Republic of the Philippines v Marcos (No 1) (1986), ILR, 81, p 581, decided by the US Court of Appeals for the Second Circuit. But cf the different (and divided) decision of the Ninth Circuit Court of Appeals: Republic of the Philippines v Marcos (No 2) (1987), ibid, p 609. On both cases see Meagher, Harv ILJ 29 (1988), pp 127–34.

Thus foreign legislation may be questioned in so far as it is alleged to affect property or interests outside the foreign state’s territory: see eg United Bank Ltd v Cosmic International Inc (1976), ILR, 66, p 246; Allied Bank International v Banco Credito Agricola de Cartago, ILM, 24 (1985), p 762; Airline Pilots Association International v TACA International Airlines, AJ, 79 (1985), p 737; Letelier v Republic of Chile, ILM, 19 (1980), pp 409, 1418. As to the non-recognition of the effects of confiscatory laws on property outside the state enacting such laws, see § 144.

In many cases acceptance by the courts of one state of the consequences of the application of a foreign state’s laws to property or rights located within its territory will follow from the rules of private international law applied by those courts, without reference to — but in implicit reliance on — the principle stated in the text.

See § 113.

168 US 250, 252. The language reflects that used earlier by the House of Lords in Duke of Brunswick v King of Hanover (1848) 2 HL Cas 1, 17.

See n 3.

Hunt v Mobil Oil Corpn (1977), ILR, 66, p 288 (motives for nationalisation); Occidental of Umm al Qaywayn v A Certain Cargo of Petroleum Laden Aboard the Tanker Dauntless Coloctronis (1978), ILR, 66, p 329 (title to oil dependent on sovereignty over disputed areas); Clayco Petroleum Corpn v Occidental Petroleum Corpn, AJ, 78 (1984), p 445 (claims necessitating scrutiny of sovereign decisions allocating oil concessions); Saltany v Reagan (1988), ILR, 80, p 19 (foreign state’s grant of permission for the use of its territory by armed forces). But if the proceedings, while touching on a foreign state’s acts, do not necessitate direct judicial inquiry into acts of a foreign state, the proceedings are not barred: Reavis v Exxon Corpn (1977), ILR, 66, p 317; Industrial Investment Development Corpn v Mitsui & Co Ltd (1979), ibid, p 386; Northrop Corpn v McDonnell Douglas Corpn, AJ, 77 (1983), p 882; Garcia v Chase Manhattan Bank, AJ, 79 (1985), p 454; Associated Containers Transportation (Australia) Ltd v USA, ILM, 22 (1983), p 824; Empresa Exportadora de Azucar v Industria Azucarera Nacional SA [1983] 2 Lloyd’s Rep 171; ILR, 64, p 368. In W S Kirkpatrick & Co Inc v Environmental Tectonics Corpn International, ILM, 29 (1990), p 182, the US Supreme Court emphasised the need for the legality or validity of some foreign state’s act within its own territory to be in issue before the act of state doctrine can be applied: the doctrine was not just a rule of judicial abstention applying to cases where the conduct of foreign policy may be affected, but a rule of decision requiring that the acts of foreign sovereigns within their own jurisdiction be deemed valid. Since the acts in question must be those of a foreign state, the doctrine has been held inapplicable in relation to acts of an international organisation: International Tin Council v Amalgamet Inc, AJ, 82 (1988), p 837.

Eg bank refusal to exchange currency because of local law (French v Banco Nacional de Cuba (1968), ILR, 66, p 6); government order prohibiting oil sales (Interamerican Refining Corpn v Texaco Maracaibo Inc (1970), ILR, 56, p 30); grant and withholding of visas (South African Airways v New York State Division of Human Rights (1970), ILR, 56, p 25); vesting of stock under trading with the enemy legislation (Oliner v Canadian Pacific Railway Co (1970), ILR, 56, p 222); nationalisation of property (Libyan American Oil Co v Socialist People’s Libyan Arab Jamahirya (1980), ILR, 62, p 220; Empresa Cubana Exportadora Inc v Lamborn & Co, AJ, 76 (1982), p 162; Spa Imprese Marittime Frasinetti v Repubblica Araba di Libia, AJ, 77 (1983), p 163); military procurement decisions (Northrop Corpn v McDonnell Douglas Corpn, AJ, 77 (l983), p 882); actions determining the extent of a state’s territorial rights (Buttes Oil & Gas Co v Hammer [1981] 3 WLR 787; Occidental Petroleum Corpn v Buttes Gas and Oil Co, AJ, 65 (1971), p 815); promulgation of exchange controls (Braka v Bancomer, ILM, 24 (1985), p 1047; Callejo v Bancomer, ibid, p 1050); operation by foreign officials of their state’s banking regulations (West v Multibanco Comermex, AJ, 81 (1987), p 660); grant of extradition by another state to the forum state (van Den Branden (1969), ILR, 69, p 223; Glaser v Procurator-General of the Canton of Berne (1964), ILR, 72, p 597; In the Trial of F E Steiner (1971), ILR, 74, p 478; Ministère Public v Desmedt and Boon (1974), ILR, 77, p 394; ‘Baader-Meinhof’ Group Terrorist Case (1977), ILR, 74, p 493). Failure to act may involve an act of state: D’Angelo v Petroleos Mexicanos (1976), ILR, 66, p 257; Associacion de Reclamantes v United Mexican States, ILM, 22 (1983), pp 625, 643.

Issuance of a patent (Mannington Mills Inc v Congoleum Corpn (1979), ILR, 66, p 487) and enforcement of a court order sought by a private party (Timberlane Lumber Co v Bank of America (1976), ILR, 66, p 270; Dominicus Americano Bohio v Gulf and Western Industries Inc (1979), ILR, 66, p 378) have been held not to be an act of state for these purposes. Similarly as regards acts of a bankruptcy trustee: Remington Rand Corpn v Business Systems Inc, AJ, 82 (1988), p 587.

10  Foreign legislation has also sometimes been examined by reference to the question of its formal validity and the constitutional competence of the organ responsible for it (see McNair and Watts, Legal Effects of War (4th ed, 1966), pp 438–40; Lipstein, BY, 42 (1967), pp 265–70; Shapleigh v Mier (1937) 299 US 468, AD, 8 (1935–37), No 14 and note thereto); Princess Paley Olga v Weisz [1929] 1 KB 718; Re Amand (No 2) [1942] 1 All ER 236, [1942] 1 KB 345 (on which see McNair and Watts, op cit, p 436); but note Buck v Attorney-General [1965] Ch 745, for a refusal by the Court of Appeal in the UK to impugn the validity of the constitution of a foreign or independent state, and Dubai Bank Ltd v Galadari and Others (No 5), The Times, 26 June 1990 declining to question the constitutionality of a foreign law in proceedings which had that as their object, but allowing the question to be considered where it needed to be resolved in the course of proceedings otherwise properly before the court. In Filartiga v Pena-Irala a finding that a foreign official’s acts were in violation of his state’s constitution and laws was decisive in rejecting the relevance of the act of state doctrine to those acts: AJ, 75 (1981), p 149.

11  As to the extra-territorial application of such laws see below, § 144.

12  See § 113.

13  Inquiry into the interpretation, scope and meaning of a foreign law is often necessary and is not precluded even if it is the state’s constitution (eg Breen v Breen [1961] 3 All ER 225), unless perhaps the foreign state concerned has officially and formally pronounced upon such matters in which case that pronouncement would itself be an ‘act of state’: see D’Angela v Petroleos Mexkanos (1976), ILR, 66, p 257.

14  See eg Iranian Mixed Marriage Case (1967), ILR, 57, p 10 (Federal Republic of Germany); and note the recognition of the doctrine by Mahmassani, sole arbitrator, in Libyan American Oil Co v Government of the Libyan Arab Republic (1977), ILR, 62, pp 140, 199.

15  In English law ‘act of state’ usually refers to a particular defence to an action in tort, by which in proceedings brought by an alien the defendant may plead that he acted under the orders of or with the subsequent approval of the British Government (or, it is usually assumed, of a foreign government). For its application in this sense, see eg Buron v Denman (1848) 2 Ex 167; Walker v Baird [1892] AC 491; Salaman v Secretary of State for India [1906] 1 KB 613 Johnstone v Pedlar [1921] 2 AC 262; Commercial and Estates Co of Egypt v Board of Trade [1925] 1 KB, at pp 290, 297; Nissan v Attorney-General [1970] AC 179. For a decision of the High Court, Pakistan, using ‘act of state’ in this sense, see Carl Zeiss Stiftung of Heidenheim v Carl Zeiss Stiftung of Jena (1967), ILR, 71, pp 4, 33. Similarly an act by the Crown in exercise of the royal prerogative in the annexation of foreign territory is an ‘act of state’ and not within the jurisdiction and control of the English courts, even in proceedings brought by a British subject: Secretary of State for India v Kamachee Boye Sahaba, 13 Moo PC 22; Doss v Secretary of State for India (1875) LR 19 Eq 509; Cook v Sprigg [1899] AC 572; Sobhuza II v Miller [1926] AC 518. See generally W Harrison Moore, Act of State in English Law (1934); Wade, BY, 15 (1934), pp 98–112; Holdsworth, Col Law Rev, 41 (1941), pp 1313–31; McNair, Opinions (vol 1, 1956), pp 111–17; Collier, Camb LJ (1968), pp 102–30; Gilmour, Public Law (1970), pp 120–52; Wade and Phillips, Constitutional and Administrative Law (9th ed, 1977), pp 299–303; Cane, ICLQ, 29 (1980), pp 680–700; F A Mann, Foreign Affairs in English Courts (1986), pp 183–90; Singer, AJ, 75 (1981), pp 282–323.

16  See the decision of the Court of Appeal in Buck v Attorney-General [1965] 1 Ch 745, 768, 770–71; see also Buttes Gas and Oil Co v Hammer [1981] 3 WLR 787, in which the House of Lords held that proceedings directly raising issues as to the sovereignty of a foreign state over territory, the extent of its territorial sea and of its continental shelf jurisdiction raised issues which were inherently non-justiciable in municipal courts. For comment see Insley and Wooldridge, ICLQ, 32 (1983), pp 62–81; Crawford, BY, 53 (1982), pp 259–68; Collier, Camb LJ, 41 (1982), pp 18–21; and on non-justiciability see Mann, Foreign Affairs in English Courts (1986), pp 63–83. In substantially similar proceedings in the USA the act of state doctrine was also applied so as to exclude inquiry into the foreign state acts in question: Occidental Petroleum Corpn v Buttes Gas & Oil Co (1972), ILR, 57, p 13. See also the Court of Appeal’s decision in Empresa Exportadora de Azucar v Industria Azucarera Nacional SA [1983] 2 Lloyd’s Rep 171; ILR, 64, p 368, and the decision of the House of Lords in Williams and Humbert Ltd v W & H Trade Marks (Jersey) Ltd [1986] 1 AC 368, 431. But an English court will disregard a foreign state’s laws operating within its own territory to the extent that taking cognizance of it would be inconsistent with the foreign policy of the UK, as put in evidence by a certificate from the Foreign Office: GUR Corpn v Trust Bank of Africa Ltd [1987] 1 QB 599.

See also Szalatnay-Stacho v Fink [1947] KB 1, and comment by Kuhn, AJ, 42 (1948), pp 108–11, and Kingh, ibid, pp 811–31; and Fayed v Al-Tajir [1987] 2 All ER 396, both cases concerning the possibility of inquiry by the courts into documents passing between foreign government officials. See also the judgment of the Court of Appeal in Shearson Lehman Brothers v Maclaine Watson & Co Ltd (1987), ILR, 77, pp 107, 132, holding that English courts could not undertake an inquiry into the question whether a foreign state or its representative had acted in breach of confidence in disseminating documents received from an international organisation.

See generally as to the position in English Law, Dicey and Morris, Rule 3(2), pp 100–1, 109–12; F A Mann, LQR, 59 (1943), pp 42–57, 155–71 (reprinted in Studies in International Law (1973), pp 420–65), and Foreign Affairs in English Courts (1986), pp 176–82; Singer, AJ, 75 (1981), pp 283–323. See also Maclaine Watson & Co Ltd v Department of Trade and Industry [1989] 3 All ER 523, and § 19, n 23ff., as to the non-justiciability in English courts of rights alleged to arise from treaties.

17  See § 1, n 10.

18  See § 113, n 6.

19  See Akehurst, BY, 46 (1972–73), pp 145, 245–50, for discussion of decisions of national courts in various States. See § 113, as to foreign legislation which is contrary to international law. In Banco Nacional de Cuba v Sabbatino (1964) 376 US 398; ILR, 35, p 2, the US Supreme Court found that the act of state doctrine was not ‘compelled either by the inherent nature of sovereign authority … or by some principle of international law’.

20  The doctrine of the immunity of foreign sovereigns is regarded as stemming from the same roots: see cases cited in the next note. As to the relationship between sovereign immunity and the act of state doctrine see van Panhuys, ICLQ, 13 (1964), pp 1193–213; Singer, AJ, 75 (1981), pp 283, 296–301; Halberstam, AS Proceedings, 1989, pp 487–92. See also Alfred Dunhill of London Inc v Republic of Cuba (1976), ILR, 66, p 212, where the US Supreme Court held that the act of state doctrine, like the rules as to sovereign immunity, did not apply ‘to acts committed by foreign sovereigns in the course of their purely commercial operations’. Note also § 113, n 12, as to s 1605(a)(3) of the Foreign Sovereign Immunities Act 1976. Whereas sovereign immunity goes to the jurisdiction of the court, act of state involves questions of non-justiticiability or judicial prudence. See International Association of Machinists and Aerospace Workers v OPEC (1981), ILR, 66, p 413. Another US Court of Appeals, while agreeing that sovereign immunity related to the court’s jurisdiction, considered act of state to relate to private international law and the limits of questioning the validity of an otherwise applicable rule of foreign law: Empresa Cubana Exportadora Inc v Lamborn & Co (1981), ILR, 66, p 404. See also D’Angelo v Petroleos Mexicanos (1974), ILR, 66, p 159.

21  Banco Nacional de Cuba v Sabbatino (1964) 376 US 398, ILR, 35, p 2; First National City Bank v Banco Nacional de Cuba (1972), ILR, 66, p 102. But mere embarrassment will not allow for the application of the act of state doctrine if the validity or legality of a foreign state’s act within its territory is not in issue: W S Kirkpatrick & Co Inc v Environmental Tectonics Corpn International, ILM, 29 (1990), p 182.

22  First National City Bank v Banco Nacional de Cuba (1972), ILR, 66, p 102. For comment see Lowenfeld, AJ, 66 (1972), pp 795–814, and Laylin, ibid, pp 823–9; and for comment on earlier stages of the case see Delson, ibid, pp 82–93; Metzger, ibid, pp 94–101; and Note in Harv ILJ, 12 (1971), pp 557–78. For the decision of the Court of Appeals consequent upon the Supreme Court decision, see ILM, 12 (1973), p 636. The Supreme Court’s decision adopted and approved the so-called ‘Bernstein exception’ to the act of state doctrine. This arose from the decision in Bernstein v Van Heyghen Frères (1947) 163 F 2d 246, AD (1947), No 5, which gave effect to oppressive legislation of the National-Socialist regime in Germany in relation to German nationals; this was followed by an announcement of the State Department in the sense that the policy of the Executive, in cases of this description, was ‘to relieve American courts from any restraint upon the exercise of their jurisdiction to pass upon the validity of the acts of Nazi officials’ (see Bishop, International Law Cases and Materials (1953), p 627, Bulletin of State Dept, 20 (1949), p 592 and Woolsey, AJ, 44 (1950), p 137); see also the later decision of the same court in Bernstein v NV Nederlandsche-Amerikaansche Stoomvart-Maatschappij (1954), 210 F 2d 375; Claim of Arnold Bernstein, AJ, 61 (1967), p 1069). See also Claim of Herbert Brower, AJ, 58 (1964), p 505; Banco Nacional de Cuba v Chase Manhattan Bank (1981), ILR, 66, p 421; Williams v Curtiss-Wright Corpn, AJ, 77 (1983), p 624. As to the operation of the ‘Bernstein exception’, in the Sabbatino cases, see Simmonds, ICLQ, 14 (1965), pp 463–4, 468–70, 476. It is not necessary for the Executive actually to issue a ‘Bernstein letter’ if there have been appropriate executive pronouncements in other similar cases: Banco Nacional de Cuba v Chemical Bank New York Trust Co, AJ, 79 (1985), p 458. See, in relation to foreign expropriations, the State Department’s letter of 19 November 1982, to the US Solicitor General: ILM, 22 (1983), p 207. The doubts expressed as to the continued applicability of the ‘Bernstein exception’ in Hunt v Coastal States Gas Producing Co (1978), ILR, 66, p 338, would appear to be misplaced.

23  Spa Imprese Marittime Frasinetti v Repubblica Araba di Libia, AJ, 77 (1983), p 163. See to similar effect a decision of the Court of Appeal, Bordeaux, in Lafuente v Llagunoy Duranona, AD (1938–40), No 55.

See § 112.

See Fachiri, BY, 12 (1931), pp 95–106; Wortley, Grotius Society, 33 (1948), pp 31–34; Morgenstern, ILQ, 4 (1951), pp 326–44. See also Re, Foreign Confiscations (1951), and Mann, LQR, 59 (1949), pp 42–57, 155–71, and ibid, 70 (1954), pp 181–202; and BY, 48 (1976–77), pp 1, 28–65; Wortley, Hag R, 94 (1958), ii, pp 195–204; Zander, AJ, 53 (1959), pp 826–52, especially pp 839ff.; Reeves, AJ, 54 (1960), pp 141–56; Domke, ibid, pp 305–23; Baade, ibid, pp 801–35; Wortley, AJ, 55 (1961), pp 680–3 (these last three in connection with legal proceedings in Dutch and German courts arising out of certain Indonesian measures of nationalisation in 1957–59); Jennings in Cambridge Essays in International Law (1965), at pp 78–81; Akehurst, BY, 46 (1972–73), pp 145, 251–7; Weil, AFDI, 23 (1977), pp 9–52; Hofmann, ZöV, 49 (1989), pp 41–58. See also the summary of the position adopted in a number of states in ILA, Report of the 63rd Conference (1988), pp 722–47. Note also § 54, as to circumstances in which a duty of non-recognition might arise. See also n 9, in connection with the Sabbatino case; § 112, n 3, as to foreign acts of state; and n 6, and § 144, as to confiscatory legislation.

See § 407 (as to the extent to which expropriation without compensation constitutes a violation of international law); § 144 (as to the extra-territorial recognition of confiscatory laws); and § 386 (as to the effect of nationality laws which conflict with international law). Courts generally are willing to inquire whether the acts of a belligerent occupant are within the occupant’s powers under international law, and to refuse them effect if they are not: see Morgenstern, BY, 28 (1951), pp 291–322, and McNair and Watts, Legal Effects of War (4th ed, 1966), pp 366–423.

In relation to giving effect to a foreign expropriatory law, important factors which can affect the court’s decision include: whether the property expropriated was at the time of expropriation situated within the jurisdiction of the expropriating state; whether the property was at the time owned by a national of that state; and whether ‘giving effect’ to the law is a matter of the court enforcing within its jurisdiction the operation of a foreign expropriatory law or merely of its acknowledging or applying there the consequences of the law’s fully executed operation elsewhere (particularly within the territory of the expropriating state).

See § 144.

Courts of some countries have on occasions refused to give effect, as being contrary to their conceptions of public policy, to foreign confiscatory legislation even when not contrary to international law and even when affecting solely the nationals of the legislating country within its territory. This, in particular, is the consistent attitude of French courts. See eg Union des Républiques Socialistes Soviétiques v Intendant Général, Sirey (1929), pt I, p 217; AD, 4 (1927–28), No 43 (and the comment thereon and other similar cases by Domke, AJ, 36 (1942), pp 26–29); Société Potasas Ibericas v Nathan Bloch, Dalloz (1939), p 257; AD, 9 (1938–40), No 54 (with regard to passing of property in the legislating country); Volatron v Moulin, Dalloz (1939), p 329; AD, 9 (1938–40), No 10. See Lipstein, Grotius Society, 35 (1949), pp 174–6, for a survey of these cases. But note Cassan v Koninklijke Nederlandsche Petroleum Maatschappij (1966), ILR, 47, p 58, holding that legislation intended to remedy a prior illegal act (by a belligerent occupant) by invalidating a title to property apparently acquired under it was distinguishable from confiscatory legislation and could be given effect. For a more recent assertion that it is a rule of French public order that no legal effect is recognised in France of a dispossession by a foreign state without an equitable indemnity, see Braden Copper Co v Le Groupement d’Importations des Métaux, ILM, 13 (1973), pp 186, 189; Carl Zeiss Heidenheim v VEB Carl Zeiss Jena (1975), ILR, 73, p 580. For similar decisions in the USA, see Menendez v Saks and Co (1973), ILR, 66, p 126; Maltina Corpn v Cawy Bottling Co (1972), ILR, 66, p 92; Zeevi and Sons Ltd v Grindlays Bank (Uganda) Ltd (1975), ILR, 66, p 168. In the Federal Republic of Germany Art 30 of the Introductory Law to the Civil Code permits the effects of a foreign law to be refused recognition if recognition would violate basic principles of German public policy, and although a foreign confiscatory law discriminating against foreigners could be contrary to German public policy, in order to be refused recognition the violation of public policy must substantially affect the German legal system: see Sociedad Minera el Teniente SA v Norddeutsche Affinerie AG (1973), ILR, 73, p 230 (and comment by Seidl-Hohenveldern, AJ, 69 (1975), pp 110–19); and NV Verenigde Deli-Maatschapijen v Deutsche-Indonesische Tabak-Handelsgesellschaft mbH (1959), ILR, 28, p 16.

As to Italy, see Vaghi v Reischbank, AD, 9 (1938–40), No 56; Koh-I-Noor Tužkárna L & C Hardtmuth Narodni Podnik v Fabrique de Crayons Hardtmuth L & C, Srl, ILR, 26 (1958-II), p 44, and (1960), ILR, 40, p 17. As to Belgium, see the Urrutia Case, AD, 8 (1935–37), No 94, and Wilkening v Belgian State, AD, 15 (1948), No 66 (as to naturalisation); Sarl ‘Koh-I Noor-L et C Hardtmuth’ v SA Agebel and Soc de Droit Tchécoslovaque Entreprise Nationale Koh-I Noor (1959), ILR; 47, p 31. See as to the Netherlands, The Baurdo, AD, 8 (1935–37), No 73 and the note thereto; the case of Trust-Maatschappij Helvetia, AD, 7 (1933–34), No 33; Indonesian Corpn PT Escomptobank v NV Assurantie Maatschappij de Nederlanded van 1845 (1964), ILR, 40, p 7: Czechoslovak National Corpn Batá v Batá-Best BV (1975), ILR, 74, p 102.

There would appear to be no decisive reason why foreign legislation should be treated in this respect differently from judgments of foreign courts. These may be refused enforcement on a number of grounds, including the fact that the foreign judgment violates principles of public policy of the lex fori. See Huntingdon v Attrill [1893] AC 150; Apt v Apt [1947] P 127. It is possible that, from this point of view, an English court might refuse recognition, as being contrary to English conceptions of public policy, to foreign legislation which is clearly contrary to international law. See also Re Helbert Wagg & Co [1956] Ch 323, 349, 352; Dicey and Morris, pp 97–8.

See generally on the application of public policy in relation to the non-application of foreign laws, Kahn-Freund, Grotius Society, 39 (1954), pp 39–69, and Holder, ICLQ, 17 (1968), pp 926–52.

Thus some Belgian and Dutch courts acknowledged the effects of expropriation without compensation in relation to aliens in the matter of Mexican expropriations of foreign oil companies: see AD, 9 (1938–40), Nos 11 and 12. It does not appear that the question of compatibility with international law was raised in these cases. Often a court will make no reference to international law for the simple reason that on the facts before it there is no question of the foreign expropriation law being contrary to international law. Thus Underhill v Hernandez (1897) 168 US 250; Oetjen v Central Leather Co (1918) 246 US 297; Ricaud v American Metal Co (1917) 246 US 304; and, in particular, Luther v Sagor [1921] 3 KB 532, frequently referred to in support of the proposition that courts must not question the legislation of foreign countries, are not germane to the present issue. There was no question, in these cases, of foreign legislative acts contrary to international law. It will also be noted that in most of these cases the refusal of courts to examine the validity of the foreign legislation in question was due to the fact that they were concerned with claims or property of the nationals of the legislating country (and that, apparently for that reason, the question of violation of international law was not at issue). See, eg the qualifying statement by Russell LJ in Princess Olga Paley v Weisz that ‘this Court will not enquire into the legality of acts done by a foreign Government against its own subjects in respect of property situate in its own territory’ [1929] 1 KB, at p 736; and to the same effect: United States v Belmont (1937) US 124; Salimoff v Standard Oil Co (1933) 262 NY 220; Oetjen v Central Leather Co (1918) 246 US 297; Eastern States Petroleum Co v Asiatic Petroleum Corpn (1939) 28 F Suppl 279; AD, 9 (1938–40), No 35. A critical review of many of the cases cited is given by Lipstein, Grotius Society, 35 (1949), pp 157–87. See the remarks of Upjohn J in Re Helhert Wagg & Co Ltd [1956] Ch 326, 346–9, suggesting that the cases were not limited to laws affecting the property of nationals of the expropriating state.

Anglo-Iranian Oil Co v Idemitsu Kosan Kabushiki Kaisha, ILR, 20 (1953), p 305; and Anglo-Iranian Oil Co v SUPOR Co, ILR, 22 (1955), pp 19 and 23 (these two cases arose out of the same facts as gave rise, with a different result, to The Rose Mary case, n 16); F Palicio Compania SA v Brush (1966), ILR, 42, p 41; Attorney-General of the United States v NV Bank voor Handel en Scheepvaart (1969), ILR, 74, p 150; Retroactivity of Laws Case (1972), ILR, 71, p 37.

(1964) 376 US 398; ILR, 35, p 2. The Sabbatino case, in its various stages, was the subject of extensive comment, amongst which see Coerper, AJ, 56 (1962), pp 143–8; Stevenson, AJ, 57 (1963), pp 97–9; Zander, ICLQ, 12 (1963), pp 668–71; Stevenson, AJ, 58 (1964), pp 707–11; Falk, ibid, pp 935–51, and The Role of Domestic Courts in the International Legal Order (1964), pp 64–138; Wright, AJ, 59 (1965), pp 304–15; Simmonds, ICLQ, 14 (1965), pp 452–92; Falk, The Aftermath of Sabbatino (1965), and The Status of Law in International Society (1970), pp 403–25; Mooney, Foreign Seizures: Sabbatino and the Act of State Doctrine (1967); F A Mann, Vir Law Rev (1965), p 604 (reprinted in Studies in International Law (1973), pp 466–91); Lillich, The Protection of Foreign Investment (1965), pp 45–113; Halberstam, AJ, 79 (1985), pp 68–91.

10  For application of the ‘treaty exception’ in the context of expropriation of property and a treaty providing for ‘prompt payment of just and effective compensation’, see Kalamazoo Spice Extraction Co v Provisional Military Government of Socialist Ethiopia, ILM, 23 (1984), p 393.

11  The Court referred to ‘controlling legal principles’ in general, but it seems clear that in the context the Court was referring in particular to principles of international law. By ‘other unambiguous agreement’ the Court would not appear to have been clearly referring to that general consent which is needed to establish rules of customary international law, but such a rule could perhaps be regarded as a matter of ‘unambiguous agreement’. By implication the Court appears to accept that the act of state doctrine would be inapplicable if the foreign act of state did involve a violation of a treaty or of an unambiguously agreed rule of customary international law. In the Sabbatino case the property seized under Cuban laws was at the time of the seizure in Cuba, was owned by a Cuban company the majority of whose shareholders were US nationals, and was seized because of the US interest in the company.

12  22 USC § 2370(e)(2), on which see Levie, AJ, 59 (1965), pp 366–70; Lowenfeld, ibid, pp 8899–908; Lillich, The Protection of Foreign Investment (1965), pp 117–46. The limits to the exclusion of the act of state doctrine as a result of the amendment have been considered in a number of cases, eg French v Banco Nacional de Cuba (1968), ILR, 66, p 6; Present v United States Life Insurance Co, AJ, 62 (1968), p 494; Menendez v Saks & Co (1973), ILR, 66, p 126; Hunt v Coastal States Gas Producing Co (1978), ILR, 66, pp 338, 361; Libyan American Oil Co v Socialist People’s Libyan Arab Jamahiriya (1980), ILR, 62, p 220. The Record of the Hearings before the House Committee on Foreign Relations and the Senate Committee on Foreign Relations on this legislation contains much valuable comment on the rule enunciated in the Sabbatino case: for references see Weissberg, ICLQ, 16 (1967), pp 704–6, nn 5, 9–17. Note also that in the US the plea of sovereign immunity is of no avail to a foreign state in proceedings in which rights in property taken in violation of international law are in issue and that property or any property exchanged for that property is present in the US in connection with a commercial activity carried on in the US by the foreign state: Foreign Sovereign Immunities Act 1976, s 1605(a)(3).

13  See § 112, n 22.

14  The US Court of Appeals (upholding the decision of the court below) had held in earlier stages of the proceedings in the Sabbatino case that the seizure under the Cuban law was contrary to international law, and should therefore not be given effect in the US by acknowledging the plaintiff’s title to property which was derived from that law: Banco Nacional de Cuba v Sabbatino, AJ, 56 (1962), p 1085. The Supreme Court’s decision had not affected that conclusion, and in later proceedings, after the enactment of the Hickenlooper amendment the Court of Appeals reaffirmed its finding that the taking was contrary to international law and rejected the plaintiff’s claim to title based on that law: Banco Nacional de Cuba v Farr Whitlock & Co (1967), ILR, 43, p 12; certiorari denied, AJ, 62 (1968), p 783.

15  See eg cases cited at n 8, and nn 16 and 17 below. See also § 112, n 10, as to inquiries into the constitutional validity of legislation. In Attorney-General of the United States v NV Bank voor Handel en Scheepvaart (1969), ILR, 74, p 150, the Netherlands Supreme Court rejected the existence of any rule of international law prohibiting the court from considering the question whether or not a seizure of property by another state is in violation of international law, even in respect of a seizure of property situated in the territory of that other state and even if the property does not belong to Dutch nationals. The Italian Court of Cassation has, however, held the acts of foreign states not to be cognizable in Italian courts even to consider their conformity with international law: Spa Imprese Marittime Frassinetti v Repubblica Araba di Libia, AJ, 77 (1983), p 163.

16  See eg Wolff v Oxholm (1817) 6 Maule and Selwyn 92; Re Krupp [1917] 2 Ch 188; Confiscation of Property of Sudeten Germans Case, AD (1948), No 12; Nisyros Mines Case, ILR, 19 (1952), No 27; Anglo-Iranian Oil Co v Jaffrate (The Rose Mary) [1953] 1 WLR 246 (on which case note the comments in Re Helbert Wagg & Co Ltd [1956] 1 Ch 323, 346, and by Lauterpacht, CLJ, 12 (1954), pp 20–22, and O’Connell, ICLQ, 4 (1955), pp 267–93); Banco Nacional de Cuba v Sabbatino, AJ, 56 (1962), p 1085 (the decision of the Court of Appeals before the decision of the Supreme Court) and Banco Nacional de Cuba v Farr Whitlock & Co (1967), ILR, 43, p 12 (the decision of the Court of Appeals after the decision of the Supreme Court — the Supreme Court did not decide the question whether the foreign law in question was contrary to international law); Blanco v Pan American Life Insurance Co, AJ, 58 (1964), p 511, affirmed, but not expressly on this point, AJ, 61 (1967), p 211; Bank Indonesia v Senembah Maatschappij and Twentsche Bank (1959), ILR, 30, p 28; Oppenheimer v Cattermole [1976] AC 249. See also the statement issued in May 1974 by the US Department of State as to its policy regarding oil nationalised by Libya in circumstances contrary to international law: ILM, 13 (1974), pp 767–82. See n 3, as to acts of a belligerent occupant in violation of international law; and §§ 386 and 391, nn 13–15, as to acquisition or loss of nationality in violation of international law.

17  Banco Nacional de Cuba v Sabbatino (1964), 376 US 398; ILR, 35, p 2; NV Verenigde Deli-Maatschappijen v Deutsch -Indonesische Tabak-Handelsgesellschaft mbH (1959), ILR, 28, p 16; Soc Minera el Teniente SA v AG Norddeutsche Affinerie (1973), ILR, 73, p 230, and ILM, 13 (1974), p 1115 (and see comment by Seidl-Hohenveldem, AJ, 69 (1975), pp 110–19); and see Foreign Judgments (Treaty of Lausanne) Case, ILR, 19 (1952), No 9, at p 23, for recognition of a judgment of a foreign court given in violation of a treaty binding on the two states concerned. Note also Wandel-Hirschberg v Jacobsfeld-Yakurska, ILR, 26 (1958-II), p 702, drawing a distinction between foreign laws affecting rights of property and those affecting personal status.

18  See § 20.

19  See § 19.

20  This is so, in particular, in countries in which international law is deemed to be part of municipal law. See § 19.

There is probably no substance in the argument that the review of — or refusal of recognition to — foreign legislation which is clearly contrary to international law constitutes a denial of the sovereignty of the foreign state in question. For it may be argued, with no less force, that the sovereignty of the state of the lex fori is put under strain if its courts are compelled to give effect to foreign legislation which is contrary to international law — especially if such legislation inflicts injury upon its nationals.

21  See Sociedad Minera el Teniente SA v Norddeutsche Affinerie AG (1973), ILR, 73, p 230.

22  Thus the rule noted at § 20, that, if possible, no intention to violate international law will be imputed to a statute, applies also to foreign legislation.

The ILC has regarded non-discrimination as a ‘general rule which follows from the equality of States’ (YBILC (1958), ii, p 105), and as a ‘general rule inherent in the sovereign equality of States’ (YBILC (1961), ii, p 128). In the particular context of most-favoured-nation clauses the ILC has also referred to it as ‘the general principle of non-discrimination’, which ‘may be considered as a general rule that can always be invoked by any State’; it has also referred to states being ‘bound by the duty arising from the principle of non-discrimination’ (YBILC (1978), ii, pt 2, pp 11, 12) and being under a ‘general duty not to discriminate between States’ (ibid, p 24). But at the same time the ILC has observed that notwithstanding any such duty, ‘States are free to grant special favours to other States on the ground of some special relationship of a geographic, economic, political or other nature’, and that, because of ‘the principle of the sovereignty of States and their liberty of action’, other states cannot, apart from an international obligation specifically undertaken by the grantor state, claim to be entitled to the same special favours: this ‘liberty includes the right of States to grant special favours to some States and not to be bound by customary law to extend the same favours to others’ (ibid, pp 12, 24). But the ILC would appear to have regarded states as entitled, on the basis of the principle of non-discrimination, to enjoy the general non-discriminatory treatment accorded by the state in question to other states on a par with them (ibid, p 12).

Questions of equality of treatment and discrimination arise particularly in various aspects of international trade and eonomic relations. In this context see Hasan, Equality of Treatment and Trade Discrimination in International Law (1968); Schwarzenberger, YB of World Affairs, 25 (1971), pp 163–81; Kaplan, and Ramcharan, ibid, 26 (1972), pp 267–85, and 286–313; Goldsmith and Sonderkötter, ibid, 28 (1974), pp 262–77; Sutton, and Stoiber, ibid, 31 (1977), pp 190–216, 217–35; Ramcharan, ibid, 32 (1978), pp 268–85; Partsch, ZöV, 45 (1985), pp 1–24. As to discriminatory exchange control measures, including the relevant provisions of the International Monetary Fund Agreement, see Fawcett, BY, 20 (1964), pp 32, 55–8; Mann, The Legal Aspect of Money (4th ed, 1982), pp 476–82, 496–9, 515–17, and 523–7. As to the GATT, see n 6; as to most-favoured-nation clauses, see § 669.

As to economic pressure on other states, see generally § 129, nn 13–16.

§ 124.

Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations (4th Principle), GA Res 2625 (XXV) (1970). To the extent that non-discrimination is inherent in the sovereign equality of states, acceptance of that principle (see § 107) would imply acceptance of a principle of non-discrimination.

Article 47. See also Vienna Convention on Consular Relations 1963, Art 72; Convention on Special Missions 1969, Art 49; Vienna Convention on the Representation of States in their Relations with International Organisations 1975, Art 83. These various provisions are not uniform.

See eg Arts XIII and XIV. A key element of the GATT is Art I, which provides for general most-favoured-nation treatment as between the contracting parties, which accordingly establishes (subject to numerous detailed rules) a regime of non-discrimination between them. See generally on the GATT, Jackson, World Trade and the Law of GATT (1969); Dam, The GATT (1970); Hilf, Jacobs and Petersmann (eds), The European Community and GATT (1986); McGovern, International Trade Regulation: GATT, the United States and the European Community (2nd ed, 1986).

See generally § 669.

As to those preferences which are permitted under the GATT, particularly Art I.2–4, see Jackson, World Trade and the Law of GATT (1969), pp 264–72. See also as to Commonwealth preferences, § 669, n 39.

See § 106, nn 6 and 9. See also Art 204 of the Law of the Sea Convention 1982; Art 5(1) of the Montreal Protocol on Substances that Deplete the Ozone Layer 1987 (ILM, 26 (1987), p 1541). It may also be noted that many treaty obligations which are qualified by phrases such as ‘as soon as possible’ or ‘as soon as practicable’ may be intended to impose a less onerous obligation on those states whose economic capacities are limited than on other states: see ILA, Report of the 63rd Conference (1988), pp 254–8.

10  See Italy v Commission [1963] ECR 165, 178; and Goldsmith and Sonderkötter, YB of World Affairs, 28 (1974), pp 262, 264–9.

11  Vienna Convention of Diplomatic Relations 1961, Art 47.2; Vienna Convention on Consular Relations 1963, Art 72.2; Convention on Special Missions 1969, Art 49. See Briggs, AJ, 56 (1962), pp 475–82. But cf Vienna Convention on the Representation of States in their Relations with International Organisations 1975, Art 83, which provides for non-discrimination in the application of the Convention, but without the further provision included in the other three Conventions.

12  See §§ 439–41.

13  See § 409.