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Published online by Cambridge University Press: 27 February 2017
The dispute arose out of a 1985 settlement of litigation between Vincente Chuidian, a Philippine national, and the Philippine Export and Foreign Loan Guarantee Corporation (Guarantee Corporation). As part of the settlement, the state-owned Philippine National Bank (Bank) issued a letter of credit to Chuidian on behalf of the Guarantee Corporation. After the Government of President Aquino took office in 1986, the Presidential Commission on Good Government (Commission) was formed and “charged with recovering ‘ill-gotten wealth’ accumulated by Marcos and his associates.” The Commission was authorized to enjoin acts that might frustrate its efforts. Raul Daza, a member of the Commission, instructed the Bank not to pay on the letter of credit issued to Chuidian, claiming that the Commission suspected that the settlement had been fraudulently entered into to prevent the revelation of facts concerning Marcos’s involvement in Chuidian’s business enterprises.
1 912 F.2d 1095, 1097.
2 28 U.S.C. §1441(d) (1988).
3 28 U.S.C. §1603(a)–(b).
4 621 F.2d 1371 (5th Cir. 1980).
5 912 F.2d at 1099.
6 28 U.S.C. §1603(a)–(b).
7 See Restatement (Second) of the Foreign Relations Law of the United States §66 (1965). The court pointed out that the American Law Institute recently issued the Restatement (Third) of Foreign Relations Law, which supersedes the second Restatement and entirely deletes the discussion of the U.S. common law of sovereign immunity in light of the FSIA. 912 F.2d at 1103.
8 All three elements of the definition of “agency or instrumentality of a foreign state” seem to contemplate legal persons, rather than natural persons. To qualify, the person must be one
(1) which is a separate legal person, corporate or otherwise, and
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (d) of this title, nor created under the laws of any third country.
28 U.S.C. § 1603(b). The legislative history contains the following paragraph, further indicating that Congress was focusing on legal persons in drafting the definition:
As a general matter, entities which meet the definition of an “agency or instrumentality of a foreign state” could assume a variety of forms, including a state trading corporation, a mining enterprise, a transport organization such as a shipping line or airline, a steel company, a central bank, an export association, a government procurement agency or a department or ministry which acts and is suable in its own name.
H.R. Rep. No. 1487, 94th Cong., 2d Sess. 15–16 (1976), reprinted in [1976] U.S. Code Cong. & Admin. News 6604, 6614 [hereinafter House Report].
9 28 U.S.C. § 1602. Prior to enactment of the FSIA, foreign governments had the option of petitioning the State Department for a “Suggestion of Immunity.” The filing of such a “Suggestion” was considered binding upon the courts. Republic of Mexico v. Hoffman, 324 U.S. 30 (1945); Ex parte Peru, 318 U.S. 578(1943).
10 28 U.S.C. § 1605(a)(1), (3), (5).
11 28 U.S.C. § 1605(a)(2).
12 In general, the filing of a responsive pleading without raising the defense of immunity constitutes a waiver under 28 U.S.C. §1605(a)(1). House Report, supra note 8, at 18.
13 462 U.S. 611 (1983). See Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (1990), summarized in 84 AJIL 922 (1990).
14 912 F.2d at 1104. The House Report makes clear that the FSIA was not
intended to affect the substantive law of liability … or the attribution of responsibility between or among entities of a foreign state; for example, whether the proper entity of a foreign state has been sued, or whether the entity sued is liable in whole or in part for the claimed wrong.
House Report, supra note 8, at 12. A later passage dealing with immunity from execution explains: “If U.S. law did not respect the separate juridical identities of different agencies or instrumentalities, it might encourage foreign jurisdictions to disregard the juridical divisions between different U.S. corporations or between a U.S. corporation and its independent subsidiary.” Id. at 29–30.
15 912 F.2d at 1104.
16 28 U.S.C. § 1605(a)(3).
17 912 F.2d at 1105.
18 28 U.S.C. § 1605(a)(5).