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The Foreign Claims Settlement Commission and Judicial Review

Published online by Cambridge University Press:  28 March 2017

Milo G. Coerper
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Extract

After World War II many Eastern European governments began programs of nationalization in which they took virtually all the private property of foreigners. Under the conditions prevailing it was quite obvious that American nationals would not be able to obtain compensation for the properties taken through local remedies. It thus became necessary for the Department of State to commence negotiations with these various governments with the object of obtaining some compensation for the properties so taken. Very little headway was made in such negotiations and the only practical device available was the economic counter-measure of blocking the assets of those foreign governments which were located in the United States. Such blocked assets could be appropriated (“vested”) where the property involved could be classified as “enemy” property. However, the blocking was purely a delaying tactic where the foreign government was not an “enemy” during World War II.

Type
Research Article
Information
American Journal of International Law , Volume 50 , Issue 4 , October 1956 , pp. 868 - 879
Copyright
Copyright © American Society of International Law 1956

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References

1 For general background see Settlement of Claims by the Foreign Claims Settlement Commission of the United States and Its Predecessors from September 14, 1949 to March 31, 1955 (U. S. Government Printing Office, 1956); Rode, Z. R., “The International Claims Commission of the United States,” 47 A.J.I.L. 615 (1953)Google Scholar; Hearings on H.R. 4406 before the Committee on Foreign Affairs, House of Representatives, 81st Cong., 1st Sess. (1949); Senate Report No. 800, 81st Cong., 2nd Sess. (1949).

2 62 Stat. (3) 2658, T.I.A.S., No. 1803.

3 64 Stat. 13, 22 U.S.C.A. §§ 1622–1627. The function and jurisdiction of that Commission were later transferred to the Foreign Claims Settlement Commission. Reorganization Plan No. 1 of 1954, effective July 1, 1954, 19 Fed. Reg. 3985, 22 U.S.C.A. § 1622 note. For the details of the Act and its application see Rode, loc. cit. 615.

4 Senate Report No. 800, op. cit.

5 Hearings before a Subcommittee of the Committee on Foreign Relations, Appendix 2, U. S. Senate, 81st Cong., 1st Sess., on S.1074.

6 95 Cong. Rec. 8840.

7 G.P.O. Publication, op. cit. supra, note 1.

8 De Vegvar v. Gillilland, 97 U. S. App. D. C. —, 228 F.2d 640 (1955). Petition for Writ of Certiorari filed in the U. S. Supreme Ct. on Jan. 30, 1956, denied March 26, 1956.

9 See Final Decision of the Foreign Claims Settlement Commission in Claim No. Y-1275, Decision No. 1460.

10 See page 869 supra.

11 A careful study of the majority opinion in the Z. & F. case does not necessarily substantiate the Government’s contention, but see the concurring opinion.

12 Z. & F. Assets Realization Corporation v. Hull, 114 F.2d 464, 72 App. D. C. 234 (1940).

13 42 Stat. 2200.

14 45 Stat. 254.

15 “The judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.”

16 The District Court took the same position in the De Vegvar case as did the Government. See pages 870 and 871 supra.

17 This same argument was made by Mrs. De Vegvar which resulted in a restraining order. See page 870 supra.

18 The lower courts distinguished the Houston and Mellon cases from the Z. & F. case, in that those cases did not involve the validity of an award, but rather a judicial determination of its ownership or distribution.

19 Sec. 2 of the Settlement of War Claims Act of 1928 (45 Stat. 254) provided that the Secretary of State shall “certify to the Secretary of the Treasury the awards of the Mixed Claims Commission,” thus placing the responsibility for executing the final determination of the Commission in the Secretary of State. The related provision of the International Claims Settlement Act of 1949 provides that the Commission itself make the certification.

20 Presently 31 U.8.C.A. § 547:

“All moneys received by the Secretary of State from foreign governments and other sources, in trust for citizens of the United States or others, shall be deposited and covered into the Treasury.

“The Secretary of State shall determine the amounts due claimants, respectively, from each of such trust funds, and certify the same to the Secretary of the Treasury, who shall, upon the presentation of the certificates of the Secretary of State, pay the amounts so found to be dne.”

21 Hackworth, Digest of International Law 763; 7 A.J.I.L. 382 (1913).

22 Nielsen’s Opinions and Report (1937) 473, 480–481; 5 Hackworth, op. cit. 775.

23 It has been argued that the Z. & F. case and Be Vegvar case cannot be compared in that the latter had its basis in a mixed claims commission and the former in a domestic commission established by domestic legislation. The writer submits that this distinction is only one of many elements to consider in characterizing claims commissions. See page 877 infra.

24 See Davis, K. C., “Unreviewable Administrative Action,” 15 F.R.D. 411 (1954).Google Scholar

25 Ibid.

26 See page 871 supra.

27 See 95 Cong. Rec. 8845. The Act of 1928 involved in the Z. & P. case did not expressly bar judicial review of decisions by the Commission or certification by the Secretary of State.

28 Congress was mindful that Yugoslavia had voluntarily agreed to permit its liability on these claims, up to $17,000,000, to be fixed by an agency of the United States Government, but that at the same time it had by express provision limited its submission to that agency only and not to the action of United States courts. Moreover, Congress respected this provision.

29 See Comegys v. Vasse, supra; Mead v. U. S., 9 Wall. 691, 76 U. S. 687 (1870).

30 Brierly, The Law of Nations 254 (4th ed., Oxford: Clarendon Press). See also L. Oppenheim, International Law (rev. 7th ed., Appleton-Century-Crofts, 1948).

31 The question of Congressional authority was not raised by Mexico, inasmuch as the judgment was favorable to her. But it would seem that the judgment would have no greater authority than that of any other judgment of a municipal court, and that Mexico would have been privileged to attack it if she had so desired. On this subject generally see Carlston, , The Process of International Arbitration 60 (New York: Columbia University Press, 1946).Google Scholar

32 Bishop, , International Law 56 (New York: Prentice-Hall, Inc., 1953).Google Scholar

33 For a general survey of these commissions see Wilson, , “Some Aspects of the Jurisprudence of National Claims Commissions,” 36 A.J.I.L. 56 (1942)Google Scholar; 6 Hackworth, op. cit. 142.

34 Ibid. See also Briggs, , “The Settlement of Mexican Claims Act of 1942,” 37 A.J.I.L. 222 (1943).Google Scholar

35 Ralston, , The Law and Procedure of International Tribunals 239 (Stanford, Calif.: Stanford Univ. Press, 1926);Google Scholar 6 Hackworth, op. cit. 549, 558; Ralston, , International Arbitration from Athens to Locarno 239 (Stanford, Calif.: Stanford Univ. Press, 1929).Google Scholar

36 See page 868 supra.

37 56 Stat. 1347.

38 The fact that the two governments in the circumstances of the Yugoslav settlement deemed it more appropriate to provide for a domestic commission rather than a mixed tribunal is not in itself determinative of the status, international or otherwise, of the Commission. John Bassett Moore defined international arbitration as follows:

“The process of adjudication by a tribunal appointed by the parties, whether its membership be national, bi-national or mixed, and whether previously constituted or named for the occasion, is technically known as arbitration, and the decision is commonly called an award.” (1 Moore, International Adjudications xxxiii.)

39 See Drucker, , “Compensation for Nationalized Property: The British Practice,” 49 A.J.I.L. 477 (1955).Google Scholar

40 On this subject generally, see Jessup, , “Responsibility of States for Injuries to Individuals,” 46 Columbia Law Review 903 (1946).CrossRefGoogle Scholar

41 The Foreign Claims Settlement Commission was intended to be a permanent agency because it was anticipated that claims agreements similar to the agreement with Yugoslavia would be negotiated in the future. The Commission has processed the claims under the Panamanian Claims Convention of Oct. 11, 1950. It continued the processing of claims placed under its jurisdiction by the War Claims Act of 1948, as amended, and is presently processing claims against Bulgaria, Hungary, Rumania, Italy and Russia brought under its jurisdiction by the amendment to the International Claims Settlement Act of 1949, as amended (69 Stat. 562). No agreements similar to the agreement made with Yugoslavia have as yet been negotiated. Quite clearly, the Commission is set up to take on various characteristics depending on the underlying compromis, if any, and the amendatory implementing legislation.

42 This was done by the Foreign Compensation Commission in the United Kingdom for this very reason; that is, to avoid the possibility of challenging “final” decisions in the courts. See Drueker, loc. cit. at 482. This procedure is possible in the United States under 31 U.S.C.A. $ 547. See note 20 supra. This provision of the Code is still in effect but has been superseded by the International Claims Settlement Act for the specific purpose of handling so-called “Funds” received pursuant to lump-sum settlement agreements or otherwise.