No CrossRef data available.
Article contents
U.S. District Court Decision in Banco Nacional De Cuba v. the First National City Bank of New York (Cuban Nationalizations; Act of State Doctrine; Sovereign Immunity)*
Published online by Cambridge University Press: 20 March 2017
Abstract
An abstract is not available for this content so a preview has been provided. Please use the Get access link above for information on how to access this content.
- Type
- Judicial and Similar Proceedings
- Information
- Copyright
- Copyright © American Society of International Law 1967
Footnotes
*
[Retyped from a photocopy of the opinion provided by the Clerk of the United States District Court for the Southern District of New York. The opinion is dated July 20, 1967.]
References
1 See note 6, infra.
2 The amount sought in the first count of the amended complaint was $2,347,000. Plaintiff at various times has argued that defendant’s claim against the Cuban government cannot be asserted against Banco Nacional, an entirely separate entity. This position is, of course, flatly inconsistent with the sovereign immunity argument. Moreover, throughout the Sabbatino litigation it was recognized by every court concerned that Banco Nacional was an instrumentality of the Cuban government. Banco Nacional v. Sabbatino, 193 F.Supp.375 (S.D.N.Y. 1961), aff’d, 307 F.2d 845 (2d Cir. 1962), rev’d, 376 U.S. 398 (1964). As Judge Weinfeld pointed out the complaint there alleged that the plaintiff was a “public corporation wholly owned by the government.” Banco Nacional v. Sabbatino, 27 F.R.D. 255, 258 (S.D.N.Y. 1961). The present amended complaint alleges only that plaintiff “is a corporate body existing under * * * the laws of the Republic of Cuba, authorized to administer the domestic and foreign credit operations of the Republic of Cuba as its agent and having its principal office in Havana, Cuba.” But any doubts as to the organic relationship between plaintiff and the Cuban government are removed by an examination of the local laws defining the function and authority of Banco Nacional. Plaintiff alone has exclusive charge of directing the banking function of the state. Law No. 891, arts. 1, 2, 3, Oct. 14, 1960. And it is plaintiff who shall exercise “the monetary sovereignty of the Nation.” Law No. 930, art. 1, Feb. 23, 1961. The Government of Cuba and Banco Nacional are indistinguishable entities for purposes of this lawsuit. Compare Dexter & Carpenter, Inc. v. Kunglig Jarnvagsstyrelsen, 43 F.2d 705 (2d Cir. 1930).
4 Pons v. Republic of Cuba, 294 F. 2d 925 (D.C. Cir. 1961), cert, den., 368 U.S. 960 (1962), is not to the contrary because the party there aggrieved by the Cuban confiscation was a Cuban national.
5 As mentioned, First National City has also interposed an affirmative counterclaim to recover the amount by which the compensation for the confiscations exceeds the $1,810,880.51 figure. I hold, however, that plaintiff’s limited waiver of immunity by instituting this suit permits only the assertion of a defensive counterclaim that “does not exceed the amount of the state’s claims.” Restatement (Second), Foreign Relations Law of the United States Sec. 70(2)(a) (1965).
6 The vitriolic language of Resolution No. 2, Def. Ex. 22, left no doubt as to the retaliatory and discriminatory motivation for the bank seizures:
“Whereas: Law No. 851 of July 6, 1960, published in the Gaceta Oficial of July 7, authorized the undersigned to order jointly, whenever they consider it necessary to the defense of the national interest, the nationalization, by means of expropriation, of the assets and companies owned by natural or juristic persons who are nationals of the United States of America, or of companies in which the said persons have an interest or participation, even though the said companies were constituted in accordance with Cuban laws.
Whereas: It is not possible to allow a large share of the nation’s banking to remain in the hands of the imperialist interests which, in an act of cowardly and criminal aggression, inspired the reduction of our sugar quota.
Whereas: Subsequent to the reduction of the sugar quota, the Government of the United States of America and the representatives of monopolistic interest of that country repeatedly committed acts of open aggression against the Cuban economy, such as those involving the curtailment of trade between the two countries, which had the obvious purpose of hampering the economic development of Cuba; and the imposition of embargoes on commercial aircraft owned by Cuban companies, under the legal guise of claims against civil debts, but which have the implicit purpose of curtailing our vital means of international communication, in an increasingly greater effort to isolate our country.
Whereas: One of the most efficient instruments of that imperialistic interference in our historical development has been typified by the operations of the American commercial banks, which have served as a financial vehicle to facilitate the monopolistic activities of the American companies in Cuba and the massive invasion of our country by imperialistic capital through usurious loans, which, far from promoting our economic growth, brought about in times of emergency numerous lawsuits resulting in the seizure of our national wealth by that imperialistic capital.
Whereas: It has always been the financial policy of these banks to encourage the activities of the American companies that devote their efforts to the procurement of our natural resources, the exploitation of our land by holders of large estates, and the mercantile operations that have contributed to the growing trend toward importing American manufactured goods, to the extent that it has hindered the development of national industries and has forced our economy to become dependent on a single crop and a single export.
Whereas: All this proves that the activities of American banks in Cuba have been a decisive factor in the disruption of our economic structure.
Whereas: It is unquestionable that the continuation of American banking interests in Cuba, a typical example of the imperialistic phenomenon, constitutes an obstacle to national liberation.
Whereas: In addition to the facts already stated, there is the deliberate practice of the United States Government designed to facilitate and to encourage, within its own territory,.counter-revolutionary activities by war criminals and and fugitive traitors.
Whereas: Furthermore, the work of international espionage in Cuban territory has been intensified under the sponsorship of that Government, with notorious contempt for international law and with the obvious intention of promoting conspiratorial activities in our country.
Whereas: All these acts are undertaken for the purpose of destroying the great achievements of the Cuban Revolution, in the wicked hope of again subjecting our country to imperialistic oppression.
Whereas: We the undersigned realize that we should exercise the authority vested in us, and that we should proceed, in responsible discharge of the revolutionary duty, to nationalize all the American banks operating in our country, thus advancing still further on the road undertaken by our people, with firm patriotic will, toward the total economic independence of our nation.
Now, therefore: Exercising the authority vested in us, in accordance with the provisions of Law No. 851 of July 6, 1960,
We Resolve:
First: To order the nationalization, by expropriation, and consequently, award to the Cuban Government, in absolute ownership, all the assets, rights and shares deriving from the utilization thereof, especially the banks, including all their branches and agencies located in Cuba, which are the property of the following legal persons:
1The First National City Bank of New York
2The First National Bank of Boston
3The Chase Manhattan Bank
Second: Accordingly, the Cuban State is hereby declared subrogated in the place and stead of the natural or juristic persons listed in the preceding paragraph with respect to the above mentioned property, rights, and rights of action, and to the assets and liabilities forming the capital of the above mentioned companies.”
* * * * * * * * * * * * * .”
7 Law No. 891, Def. Ex. 10.
8 The Sabbatino amendment is inapplicable “in any case with respect to which the President determines that application of the act of state doctrine is required in that particular case by the foreign policy interests of the United States and a suggestion to this effect is filed on his behalf in that case with the court.” 22 U.S.C, Sec 2370(e)(2). However, since the Executive Branch has maintained silence for the six years this action has been pending, it is clear that it has not determined that foreign policy interests of the United States require application of the act of state doctrine here.
9 22 U.S.C. Sec. 2370(e).
10 Any sum which First National City is permitted to set-off in this action will, of course, have to be taken into account by the United States Foreign Claims Settlement Commission in assessing claims filed by First National City.
See International Claims Settlement Act Sec. 501, 89 Stat. 1110 (1964); 22 U.S.C. Sec. 1643.