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Proposed Amendment of the Foreign Sovereign Immunities Act

Published online by Cambridge University Press:  27 February 2017

Timothy B. Atkeson  and
Stephen D. Ramsey
Timothy B. Atkeson
Affiliation:
Of the District of Columbia Bar
Stephen D. Ramsey
Affiliation:
Of the District of Columbia Bar
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Type
Current Developments
Information
American Journal of International Law , Volume 79 , Issue 3 , July 1985 , pp. 770 - 789
Copyright
Copyright © American Society of International Law 1985

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References

1 S. 1071, 99th Cong., 1st Sess., 131 Cong. Rec. S5363 (daily ed. May 3, 1985). See the Appendix to this Note for the text of the proposed amendments to the Foreign Sovereign Immunities Act.

2 28 U.S.C. §§1330, 1602-1611 (1982).

3 Copies of the ABA proposals and ABA action on them are available from the American Bar Association, Section of International Law, 1800 M Street, N.W., Washington, D.C. 20036.

4 Of course, the executive branch has stated its position on various provisions of the FSIA in amicus briefs. See, e.g., Brief for the United States as Amicus Curiae, reprinted in 20 ILM 161 (1981), in Libyan American Oil Co. [LIAMCO] v. Libya, 684 F.2d 1032 (D.C. Cir. 1981); see also Statement of Interest of the United States, reprinted in 22 ILM 1077 (1983), in Jackson v. People’s Republic of China, 550 F.Supp. 869 (N.D. Ala. 1982).

5 See Cira, , The Challenge of Foreign Laws to Block American Antitrust Actions, 18 Stan. Int’l L.J. 247 (1982)Google Scholar.

6 For example, at least one court has issued findings of fact against a foreign governmental agency as a sanction for that agency’s failure to respond to discovery requests. Wyle v. Bank Melli of Iran, 577 F.Supp. 1148, 1153 (N.D. Cal. 1983).

7 June 10, 1958, 21 UST 2517, TIAS No. 6997, 330 UNTS 3.

8 Mar. 18, 1965, 17 UST 1270, TIAS No. 6090, 575 UNTS 159.

9 Jan. 14, 1981, reprinted in 75 AJIL 422 (1981), 20 ILM 223 (1981).

10 See 28 U.S.C. §1605(a)(l) (1982).

11 H.R. Rep. No. 1487, 94th Cong., 2d Sess. 18 (1976), reprinted in 1976 U.S. Code Cong. & Ad. News 6604, 6617.

12 Compare Libyan Am. Oil Co. [LIAMCO] v. Libya, 482 F.Supp. 1175 (D.D.C. 1980), vacated mem., 684 F.2d 1032 (D.C. Cir. 1981); Ipitrade Int’l v. Nigeria, 465 F.Supp. 824 (D.D.C. 1978) with Maritime Int’l Nominees Establishment [MINE] v. Guinea, 693 F.2d 1094 (D.C. Cir. 1982); Ohntrup v. Firearms Center Inc., 516 F.Supp. 1281 (E.D. Pa. 1981); Verlinden B.V. v. Central Bank of Nigeria, 488 F.Supp. 1284 (S.D.N.Y. 1980), aff’d on other grounds, 647 F.2d 320 (2d Cir. 1981), rev’d, 461 U.S. 480 (1983).

The court of appeals in MINE concluded that the relevant arbitration agreement was not an implicit waiver of immunity because plaintiff MINE’S prior litigation position (arguing that U.S. courts were not intended to enforce the agreement) precluded it from asserting that U.S. courts were intended to enforce the agreement. 693 F.2d at 1103. The court in Ohntrup concluded that an agreement to arbitrate before the “Paris International Court” was not an implicit waiver of immunity in an action on the underlying claim because “a waiver of immunity by a state as to one jurisdiction cannot be interpreted to be a waiver as to all jurisdictions.” 516 F.Supp. at 1285. In refusing to conclude that an agreement to arbitrate was an implied waiver of immunity in an action in U.S. court, the district court in Verlinden noted that “Congressional history cited by the plaintiff is not dispositive of this issue, indeed, it is at most ambiguous.” 488 F.Supp. at 1301.

13 Restatement of the Foreign Relations Law of the United States (Revised) §497 Reporters’ Note 8, at 158 (Tent. Draft No. 4, 1983) (citing LIAMCO and Ipitrade for support).

14 A subsidiary issue is whether constitutional “minimum contacts” are required in an action to enforce an arbitral award or agreement. The U.S. Government has concluded that there is no constitutional problem of contacts with the forum in enforcing arbitral awards pursuant to the implied waiver provision in FSIA § 1605(a)(1):

“Contacts” between the defendant and the United States are not required where the judgment sought is not an adjudication ab initio on the merits but rather the enforcement of an award rendered in a foreign jurisdiction where the defendant had the opportunity to appear and contest the entry of judgment.

Brief for the United States as Amicus Curiae, supra note 4, at 36, 20 ILM at 163. See also Olmstead, , Enforcement of a Foreign Arbitral Award against a Government—A Catch 22, 1981 Private Investors Abroad 213, 225 Google Scholar.

15 “Under the Convention, the sole role assigned to domestic courts relates to the recognition and enforcement of ICSID awards.” Delaume, , ICSID Arbitration and the Courts, 77 AJIL 784, 785 (1983)CrossRefGoogle Scholar.

16 State Immunity Act 1978, ch. 33, §9(1), reprinted in 17 ILM 1123 (1978).

17 Foreign Sovereign Immunity Act, 1981, reprinted in Materials on Jurisdictional Immunities of States and their Property 34, UN Doc. ST/LEG/SER.B/20 (1982).

18 State Immunity Act of 1977, reprinted in id. at 28.

19 State Immunity Ordinance, 1981, reprinted in id. at 20.

20 The Canadian State Immunity Act of 1982, ch. 95, reprinted in 22 ILM 798 (1982), does not expressly address the effect of arbitration agreements as waivers of immunity.

21 550 F.2d 68 (2d Cir.), summarized in 71 AJIL 780 (1977), cert, denied, 434 U.S. 984 (1977).

22 International Ass’n of Machinists & Aerospace Workers v. Organization of Petroleum Exporting Countries, 477 F.Supp. 553 (CD. Cal.), aff’d, 649 F.2d 1354 (9th Cir. 1981), cert, denied, 454 U.S. 1163 (1982).

23 22 U.S.C. §2370(e)(2) (1982).

24 See Sanchez v. Banco Central de Nicaragua, 515 F.Supp. 900 (E.D. La. 1981) (rare case accepting jurisdiction under § 1605(a)(3)).

25 See Carey v. National Oil Corp. (S.D.N.Y.), aff’d, 592 F.2d 673 (2d Cir. 1979) (declining jurisdiction because of no direct effect within the United States).

26 28 U.S.C. §1607(1982).

27 See, e.g., Empresa Cubana Exportadora de Azucar y sus Derivados v. Lamborn & Co., 652F.2d231 (2d Cir. 1981).

28 Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682 (1976).

29 The policy objectives of the modern act of state doctrine were established in the Supreme Court decision in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964). See Henkin, , The Foreign Affairs Power of the Federal Courts: Sabbatino, 64 Colum. L. Rev. 805 (1964)CrossRefGoogle Scholar.

30 See LIAMCO, 482 F.Supp. 1175 (D.D.C. 1980).

31 See Note, , Prejudgment Attachment of Frozen Iranian Assets, 69 Calif. L. Rev. 837 (1981)Google Scholar; Note, , Prejudgment Attachment of Iranian Assets in the United States: Waiving Sovereign Immunity, 13 N.Y.U.J. Int’l L. & Pol. 675 (1981)Google Scholar.

32 28 U.S.C. §1610(d)(l) (1982).

33 See Electronic Data Sys. Corp. v. Social Sec. Org. of the Gov’t of Iran, 610 F.2d 94 (2d Cir. 1979); Reading & Bates Corp. v. National Iranian Oil Co., 478 F.Supp. 724 (S.D.N.Y. 1979).

34 See ABA report accompanying ABA proposals, supra note 3.

35 22 U.S.C. §254e (1982).

36 See Letelier v. Republic of Chile, 748 F.2d 790 (2d Cir. 1984), summarized in 79 AJIL 447 (1985).

37 First Nat’l City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S. 611 (1983), summarized in 78 AJIL 230 (1984).

38 28 U.S.C. § 1605(b) (1982). See generally Yiannopoulos, , Foreign Sovereign Immunity and the Arrest of State-Owned Ships: The Need for an Admiralty Foreign Sovereign Immunity Act, 57 Tul. L. Rev. 1274 (1983)Google Scholar.

39 See H.R. Rep., supra note 11, at 21.

40 See, e.g., Jet Line Servs., Inc. v. M/V Marsa El Hariga, 462 F.Supp. 1165 (D. Md. 1978).

41 The House report indicates that if a claimant arrests or attaches a foreign state-owned vessel, the claimant “will lose his in personam remedy.” H.R. Rep., supra note 11, at 21.

42 46 U.S.C. §911 (1982). For background information on this point, see Yiannopoulos, supra note 38, at 1331-32.

43 See §3(3) of British State Immunity Act, supra note 16.

44 461 U.S. 480, 103 S.Ct. 1962 (1983). See generally Recent Development Comment, 24 Va. J. Int’l L. 201 (1983).

45 488 F.Supp. 1284 (S.D.N.Y. 1980).

46 647 F.2d 320 (2d Cir.), rev’d, 103 S.Ct. 1962 (1983).

47 Verlinden, 103 S.Ct. 1962 (1983).

48 Id. at 1967.

49 Id. at 1968.

50 22 U.S. (9 Wheat.) 738 (1824).

51 Id. at 822.

52 Verlinden, 103 S.Ct. at 1971.

53 See Kane, , Suing Foreign Sovereigns: A Procedural Compass, 34 Stan. L. Rev. 385, 411-12 (1982)Google Scholar; Note, , Forum Non Conveniens and American Plaintiffs in the federal Courts, 47 U. Chi. L.Rev. 373(1980)Google Scholar.

54 See McDougal, , The Foreign Sovereign Immunities Act of 1976: Some Suggested Amendments, 1981 Private Investors Abroad 1 Google Scholar; Smit, , The Foreign Sovereign Immunities Act of 1976: A Plea for Drastic Surgery, 74 ASIL Proc. 49 (1980)Google Scholar.

55 H.R. Rep., supra note 11, at 17.

56 Verlinden, 103 S.Ct. at 1971 n.20.

57 See Brower, , Bistline, & Loomis, , The Foreign Sovereign Immunities Act of 1976 in Practice, 73 AJIL 200 (1979)CrossRefGoogle Scholar; Carl, , Suing Foreign Governments in American Courts: The United States Foreign Sovereign Immunities Act in Practice, 33 Sw. L.J. 1009 (1979)Google Scholar; Note, , Commercial Activity under the Foreign Sovereign Immunities Act of 1976: Toward a More Practical Definition, 34 Baylor L. Rev. 295 (1982)Google Scholar; Note, , Foreign Sovereign Immunity and Commercial Activity: A Conflicts Approach, 83 Colum. L. Rev. 1440 (1983)Google Scholar; Note, , Establishing Jurisdiction under the Commercial Activities Exception to the Foreign Sovereign Immunities Act of 1976, 18 Hous. L. Rev. 1003 (1982)Google Scholar.

58 The Japanese Government’s actions to restrain steel and automobile exports to the United States are examples of sovereign action. The foreign sovereign compulsion defense would protect private exporters from antitrust liability in these cases. See Letter from W. Smith, U.S. Attorney General, to Y. Okawara, Ambassador of Japan to the United States, May 7, 1981 (copies available from the authors).

59 See Laker Airways Ltd. v. Sabena, 731 F.2d 909 (D.C. Cir. 1984), summarized in 78 AJIL 666 (1984).

60 The direct effects test seems to exclude actions by Americans against foreign governments and governmental agencies for their personal injury or death abroad. See Harris v. VAO Intourist, Moscow, 481 F.Supp. 1056 (E.D.N.Y. 1979); Upton v. Empire of Iran, 459 F.Supp. 264 (D.D.C. 1978), aff’d mem., 607 F.2d 494 (D.C. Cir. 1979).

61 See, e.g., Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247 (9th Cir. 1980); Waukesha Engine Div. v. Banco Nacional de Fomento Cooperative 485 F.Supp. 490 (E.D. Wis. 1980).

62 See Note, , Effects Jurisdiction under the Foreign Sovereign Immunities Act and the Due Process Clause, 55 N.Y.U.L. Rev. 474 (1980)Google Scholar.

63 647 F.2d 300 (2d Cir. 1981).

64 Id. at 312.

65 Id. at 313.

66 International Shoe Co. v. Washington, 326 U.S. 310 (1945).

67 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).

68 647 F.2dat314.

69 See, e.g., Rio Grande Transp., Inc. v. M/V Ibn Batouta, 516 F.Supp. 1155 (S.D.N.Y. 1981).