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Competence of Courts in Regard to Non-Sovereign Acts of Foreign States

Published online by Cambridge University Press:  12 April 2017

William T. R. Fox
William T. R. Fox*
Affiliation:
School of Public and International Affairs of Princeton University
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Extract

Nineteenth century states exhibited an impressive uniformity in their internal organization. There was widespread agreement as to the “proper” scope of state activity. This clear separation of the spheres of “sovereign” (governmental) and “non-sovereign” (private) activity shaped the development of certain doctrines of international law. The complete jurisdictional immunity granted to foreign sovereigns implicitly, though not explicitly, assumed such a clear-cut distinction. There was little objection to the rule as long as the sovereign rarely “descended into the market-place. ” The original assumption is no longer realistic. Must the courts of foreign states still recognize sovereign immunity in litigation in which the state appears in the sphere formerly reserved to private enterprise?

Type
Research Article
Information
American Journal of International Law , Volume 35 , Issue 4 , October 1941 , pp. 632 - 640
Copyright
Copyright © American Society of International Law 1941

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References

1 The problem had received attention at the Institut de Droit International in 1892. A “projet de règlement international sur la compétence des tribunaux dans les procès contre les États, souverains ou chefs d’États étrangers” listed categories of actions with respect to which foreign courts were competent, including “les actions qui se rapportent à un établissement commercial ou industriel ou à chemin de fer, exploités par l’État étranger sur le territoire.” (Annuaire de I’Institut de Droit International, XI [1892], 436.)

2 An analogous development in municipal law has been the growth of the tort liability of the sovereign when acting in a “non-sovereign” capacity. For an extended survey of the status of tort liability of sovereigns and trenchant criticism of the Anglo-American law, see Borchard’s series of eight articles (“Government Liability in Tort,” Yale Law Journal, XXXIV [1925], 1, 129, 229; “Government Responsibility in Tort,” ibid., XXXVI [1927], 1, 757, 1039; “Theories of Government Responsibility in Tort,” Columbia Law Review, XXVIII [1928], 577, 734).

3 The conclusions of M. Matsuda, rapporteur for the subcommittee on competence of courts in regard to foreign states of the League of Nations Committee of Experts for the Progressive Codification of International Law, reflect this disagreement. His conclusions may be summarized as follows:

There is unanimous agreement that no jurisdiction exists with respect to sovereign states performing sovereign functions. With respect to other cases there are two main groups subscribing to the following doctrines: (1) Immunity attaches to the person of the state and is independent of the intrinsic nature of the act performed. This immunity can only be lost through tacit or express waiver. (2) Immunity attaches only to acts which represent true manifestations of the sovereign authority. These “true manifestations” he declares to be difficult to discover. League of Nations Doc. C.201.M.78.1927.V; this Journal, Supplement, Vol. 22 (1928), p. 127.

4 E.g., in Schooner Exchange v. McPadden, John Marshall declared: “Aprince, by acquiring property, may possibly be considered as subjecting that property to the territorial jurisdiction; he may be considered as so far laying down the prince, and assuming the character of a private individual; but this he cannot be presumed to do, with respect to any portion of that armed force, which upholds his crown, and with the nation he is intrusted to govern” (7 Cranch 116, 145 [1812]).

5 L. B. [1920], P. 30, 36–37. This ship, carrying a cargo of cork-shavings, under a bill of lading showing the goods were consigned to a private importer, sank at the mouth of the River Mersey. It was then salvaged, there being no evidence at this time that it belonged to the Portuguese Government. When the salvor commenced an action in rem for services rendered, the Portuguese chargé d’affaires informed the court that the ship was a public vessel.

6 255 U. S. 216 (1921); again, upon the same claim, 271 U. S. 562 (1926). When this case first reached the Supreme Court, it was held that the suggestion of government ownership must oome through official channels, viz., the Department of State. The Italian Ambassador had intimated directly to the federal district court exercising admiralty jurisdiction that the vessel was government-owned. The high court did not decide at this point whether it would have granted immunity had it been claimed in the proper way.

7 The Attualita, 238 Fed. 909 (1916).

8 The Secundus, 15 Fed. (2d) 711 (1926).

9 In the Pesaro and again in Kunglig Jarnvagsstyrelsen v. Dexter and Carpenter, 32 Fed. (2d) 195; certiorari denied, 280 U. S. 579 (1930). Denial of immunity in this type of case forces the foreign sovereign in each type of case to decide whether it wishes to claim immunity. For business reasons it might forego such a claim. The sovereign enterpriser who refuses to be sued may not be in as advantageous a bargaining position as a competing private enterpriser who cannot refuse to be sued. Perhaps this is the explanation for the instructions which were sent in April, 1924, to United States diplomatic representatives. “The United States will not claim that ships operated by or on behalf of the United States Shipping Board, when engaged in commercial pursuits, are entitled to immunity from arrest or to other special advantages which are generally accorded the public vessels of a foreign nation. Such ships will be permitted to be subject to the laws of foreign countries which apply under otherwise like conditions to privately owned merchant ships foreign to such countries.” (Quoted in Garner, James W., “Immunities of State-Owned Ships Employed in Commerce,” British Year Book of International Law, Vol. VI, 1925, pp. 128–43 Google Scholar at p. 136. Italics mine.)

10 Decision of Hamburg Court of Appeal, Feb. 28, 1921, quoted and translated in Evans, Lawrence B., Leading Cases on International Law (2d ed., Chicago, Callaghan, 1922), p. 259 Google Scholar; text in Hanseatische Gerichtszeitung (1921), p. 85.

11 15 Asp. 52, 56 (1923).

12 Art. 3, Sec. 1 (in part). Hudson, International Legislation, Vol. III, p. 1837, at p. 1840. Note also the additional protocol to that convention, signed at Brussels, May 24, 1931 (ibid., Vol. VI, p. 868). For a discussion of a related problem, the competence of prize courts over government-owned merchant vessels and the corresponding right of visit and search, see comment on Article 1 (i) of the Draft Convention, “Rights and Duties of Neutral States in Naval and Aërial War,” Research in International Law (Cambridge, Mass., Harvard Law School, 1939), pp. 217–22; also published in this Journal, Supplement, Vol. 33 (1939), pp. 217–22. The reporter concludes that commercial character, rather than public or private ownership, should furnish the proper criterion of distinction.

13 A series of bilateral treaties on the jurisdictional immunity of Soviet trade delegations has been negotiated. While still contending that trade is (from the Soviet point of view of the proper sphere of state activity) as much for a public purpose as diplomacy, representatives of the Soviet Union discovered that to do business with foreign merchants in those countries in which private enterprise is still the rule, it was better to assume full responsibility for the obligations contracted by their official trade delegations, including even provisions for compulsory execution. Note that the competence of foreign courts was not admitted for any other obligations. Apparently the co-existence of official trade delegations and other special representatives of the Soviet Union in the same country in effect permits the Soviet authorities to decide in each case whether consent to the jurisdiction of the municipal courts shall be given.

Cf. Economic Agreement, annexed to the treaty between Germany and the U.S.S.R., signed at Moscow, Oct. 12, 1925, especially Arts. 6–10 (53 League of Nations Treaty Series, p. 85, No. 1257).

Although the officials of the Soviet Union are not slow to claim immunity for heads of trade delegations, they do not hesitate when convenient to use the government corporation as a device for escaping responsibility. Hazard’s explanation follows: “Each factory, each mine, each trading unit, is separately incorporated as a state enterprise. . . . Under this form of organization the Soviet Government is not itself handling business. Soviet theorists maintain that these enterprises are just trading and producing corporations to be looked upon in international law as private corporations” ( Hazard, J. N., “The Soviet Concept of International Law,” Am. Soc. Int. Law, Proceedings, 1939, pp. 41–42)Google Scholar.

In the same discussion from which the above quotation was taken, Mr. Hazard was asked how the Soviet jurists would reconcile their apparently conflicting positions with regard to diplomatic immunity and responsibility. Mr. Hazard replied that failure to reconcile inconsistent legal positions was not unique to Soviet lawyers. Having already stated the Soviet thesis that law is a mere tool of policy, he probably saw no reason to expect that Soviet jurists would bother to attempt a reconciliation.

14 Capitaine Hall c. Capitaine Zacarias Bengoa, Bulletin de legislation et de jurisprudence égyptienne, XXXIII [1920–21], 25–26; quoted and translated in Garner, “Immunities of State-Owned Ships,” op. cit, p. 137.

15 Chambre des Requêtes, Decision of Feb. 19, 1929; quoted in Niboyet, J. P., “Les immunités de juridiction, en droit français, des états étrangers engagés dans transactions privées,” Revue générale de droit international public, XLIII (1936), 530 Google Scholar.

16 Borchard, “Government Responsibility in Tort,” op. cit, p. 1100.

17 Cour de Paris, Decision of Mar. 15, 1872; quoted in Niboyet, “Les immunités de juridiction,” op. cit., p. 527.

18 Ibid., p. 528.

19 277 Fed. 473, 481.

20 Rappresentanza commerciale dell’Unione delle repubbliche sovietiste socialiste c. Ditta Tesini e Malvezzi (1925); translated in Research in International Law, “Competence of Courts in Regard to Foreign States” (Cambridge, Mass., Harvard Law School, 1932), pp. 625–26; also published in this Journal, Supplement, Vol. 26 (1932), pp. 625–26. Not only the draft convention but the comment and supporting quotations are indispensable in the study of this subject.

21 Ibid., p. 459.

22 21 Fed. (2d) 180.

23 31 Fed. (2d) 199.

24 71 Fed. (2d) 524.

25 Decided by Corte di Cassazione del Regno, Sezioni unite, 1926; 67 Monitore dei Tribunali (1926), 288; 1926 Giurisprudenza Italiana 774; cited in Research in International Law (1932), p. 627.

26 Research in International Law (1932), pp. 456–57.

A similar problem to that under discussion arises in the matter of the border-line cases of diplomatic immunity. Cf. Brookfield, S. H., “Immunity of the Subordinate Personnel of a Diplomatic Mission,” Br. Y. B. Int. Law, Vol. XIX (1938), pp. 151–60 Google Scholar.

In Barbuit’s Case (Great Britain, Court of Chancery, 1737), Talbot, L. C, said: “It has been said that to make him a public minister, he must be employed about state affairs. In which case, if state affairs are used in opposition to commerce, it is wrong; but if only to signify the business between nation and nation, the proposition is right; for trade is a matter of state, and consequently a proper subject for the employment of an ambassador” (Cases and Other Materials on International Law, ed. Hudson, Manley O., St. Paul, West Publishing Co. , 1929, p. 875 Google Scholar).

Note that Talbot rejects “trade” as a sufficient criterion for denying diplomatic immunity. Writing in the eighteenth century, he was free from the individualist conception of the “proper” function of the state. His criterion is “business between nation and nation.” Thus, if trade is a matter of state in both states, diplomatic immunity would be granted. In a “transitionary “ period the diplomatic immunity of a trade representative would be determined by the scope of the state activity in the receiving state. Talbot’s rule thus approaches closely the frankly legislative solution laid down in a related field by the authors of the Harvard Draft Convention on the Competence of Courts in Regard to Foreign States.