TINOCO CLAIMS ARBITRATION (GREAT BRITAIN V.
COSTA RICA)
FACTS:
Tinoco contracted a lot of foreign debt while running Costa Rica, including with
Great Britain. Great Britain claimed that the former government of Costa Rica, the
Tinoco regime, had granted oil concessions to a British company that had to be honored
by the present regime. The Tinoco regime that had seized power in Costa Rica by coup
was not recognized by Great Britain and the United States. When the regime fell, the
new government nullified all of Tinocos contracts, including an oil concession to a
British company. Great Britain claimed that the contract could not be repudiated
because the Tinoco government was the only government in existence at the time the
contract was signed. This view was not shared by Costa Rica who claimed that Great
Britain was estopped from enforcing the contract by its non-recognition of the Tinoco
regime. Hence, the matter was sent for arbitration.
ISSUE:
Whether or not a government needs to conform to a previous constitution if the
government had established itself and maintained a peaceful de facto administration
and does non-recognition of the government by other government destroy the de facto
status of the government
RULING:
No. A government need not conform to a previous constitution if the government
had established itself and maintained a peaceful de facto administration and nonrecognition of the government by other government does not destroy the de facto status
of the government. The non-recognition of the Tinoco regime by Great Britain did not
dispute the de facto existence of that regime. There is no estoppel since the successor
government had not been led by British non-recognition to change its position.
Even an illegal government may bind a state to international obligations.
International law looks to the State, not the government entity within the state. The
question is not if the government abides by a constitution but if it has established itself
in such a way that all within the its influence recognize its control, and that there is no
opposing force assuming to be a government in its place. As long as it is the effective
government of the state it is the government of the state. Debts owed are not owed by
the government of the day but between the state the only legal entity that is relevant is
the state.
THE SAPPHIRE (U.S. SUPREME COURT)
FACTS:
Sapphire (United States) and Euryale (France) collide in the harbor of San
Francisco on the morning of December 22, 1867, by which the Euryale was
considerably damaged. A libel was filed in the district court two days afterwards in the
name of the Emperor Napoleon III, then Emperor of the French, as owner of the
Euryale, against the Sapphire. The claimants filed an answer alleging, among other
things, that the damage was occasioned by the fault of the Euryale. Depositions were
taken and the court decreed in favor of the libellant and awarded him $15,000, the total
amount claimed. The claimants appealed to the circuit court, which affirmed the decree.
Euryale sues in district court in the name of Napoleon III, through appeals reaches
Supreme Court, Napoleon III deposed in 1870 before case reaches Supreme Court.
ISSUE:
Whether or not international law binds the representative of the State
RULING:
No. In relation to International legal personality and identity of the agent of the
state, International Law binds the state not representative. Both parties in this case are
at fault and damages should be divided equally. The suit originally brought forth by
Napoleon had not been abated even though Napoleon was deposed. The right to sue
and receive compensation belonged to French state as a legal entity. A foreign
sovereign can bring a civil suit in the courts of the United States.
A claim arising by virtue of being such sovereign (such as an injury to a public
ship of war) is not defeated, nor does suit therefor abate, by a change in the person of
the sovereign. Such change, if necessary, may be suggested on the record. If an injury
to any party could be shown to arise from a continuation of the proceedings after a
change in the person of the sovereign, the court, in its discretion, would take order to
prevent such a result. If a vessel at anchor in a gale could avoid a collision threatened
by another vessel and does not adopt the means for doing so, she is a participant in the
wrong, and must divide the loss with the other vessel.
VICTORY TRANSPORT (U.S. COURT OF APPEALS)
FACTS:
Petitioner, as owner of the vessel S.S. Hudson, voyage chartered her to
respondent, a branch of the Ministry of Commerce of the Spanish government, for a
voyage carrying a wheat cargo from Mobile, Alabama, to two ports in Spain. The vessel
sustained damage at the discharging ports and petitioner makes claims exceeding
$200,000. The charter party was made in New York and provides for arbitration of
disputes arising under it in New York. After both its demands for payment and for
arbitration were ignored, petitioner secured an ex parte order from the court permitting
service of its petition to compel arbitration by registered mail. The Owner of a cargo ship
wants to sue the Spanish Ministry of Commerce in a United States Court. The
Government of Spain says that because of foreign sovereign immunity, it cannot be
sued in a U.S. court without its consent, and it declines that.
ISSUE:
Whether or not the theory of restrictive immunity is applicable
RULING:
Yes. The theory limits a foreign nations immunity from suit to acts of a noncommercial nature. This action affirmed a district court order compelling arbitration
between American shipowner and the Spanish Ministry of Commerce in accordance
with the terms of a contract to carry wheat from Alabama to Spain. Although the Spanish
Consul asserted that the Ministry, as a branch of the Spanish Government, was immune
from sit in American Courts, the courts classified the transaction as commercial and
permitted the suit.
The purpose of the restrictive theory of sovereign immunity is to try to
accommodate the interest of individuals doing business with foreign governments in
having their legal rights determined by the courts, with the interest of foreign
governments in being free to perform certain political acts without undergoing the
embarrassment or hindrance of defending the propriety of such acts before foreign
courts. Sovereign immunity is a derogation from the normal exercise of jurisdiction by
the courts and should be accorded only in clear cases.
UNDERHILL V. HERNANDEZ (U.S. SUPREME COURT)
FACTS:
In an 1892 revolution, General Jos Manuel "Mocho" Hernndez expelled the
existing Venezuelan government and took control of Ciudad Bolivar, where plaintiff
Underhill lived and ran a waterworks system for the city. Underhill, an American citizen,
repeatedly applied to Hernandez for an exit passport, but his requests were refused,
and Underhill was forced to stay in Ciudad Bolivar and run the waterworks. Hernandez
finally relented and allowed Underhill to return to the United States, where he instituted
an action to recover damages for his detention in Venezuela. In finding for the
Defendant, a New York Court determined that Hernandez had acted in his official
capacity as a military commander so his actions were those of the Venezuelan
government. The Court therefore refused to hear Underhill's claim against the
government based on the Act of State Doctrine. The Court reasoned, "Every sovereign
state is bound to respect the independence of every other sovereign state, and the
courts of one country will not sit in judgment on the acts of the government of another,
done within its own territory."
ISSUE:
Whether or not the Act of State Doctrine was applicable in this case
RULING:
Yes. Every sovereign State is bound to respect the independence of every other
sovereign State, and the courts of one country will not sit in judgment on the acts of the
government of another done within its own territory. Redress of grievances by reason of
such acts must be obtained through the means open to be availed of by sovereign
powers as between themselves.
The decision in this case strongly indicates that the doctrine had its origins in
notions of sovereign equality and was based on the view that international law imposed
limits on the ability of States to exercise jurisdiction over other States. The doctrine is
not required by international law neither customary international law nor treaty law, but it
is a principle recognized and adhered to by United States federal and state courts.
LUTHER V. SAGOR (GREAT BRITAIN, COURT OF APPEALS)
FACTS:
Luthers factory was confiscated and nationalized by Soviet Government. James
Sagor then purchases factory. The Trial judge asks Great Britain for a executive
certificate stating whether Great Britain recognized the Soviet government because if so
Great Britain will enforce Soviet decrees without questioning them. The Soviet
Government was not recognized by Great Britain as the sovereign state so they were
not able by decree to deprive the plaintiff company of its property. On Appeal, there was
new evidence that Great Britain had recognized the Soviet government as the de facto
government of Russia, so acts of that government must be treated by the courts as acts
of a recognized sovereign state
ISSUE:
Whether or not the courts of the country must recognize sovereignty of the
foreign government and the validity of its acts in the situation wherein the foreign
government is recognized by the government of a foreign country
RULING:
Yes. Whether the Soviet decree in question is a valid legislative act which can be
recognized as such by the courts of this country must depend upon whether the power
from which it purports to emanate is a sovereign power. The proper source of
information as to a foreign power, its status and sovereignty, is the sovereign of this
country through the government.
If a foreign government is recognized by the government of this country, the
courts of another country, the courts of that country may and must recognize the
sovereignty of that foreign government and the validity of its acts. This court is satisfied
that His Majestys government has recognized the Soviet government as the de facto
government of a Russian Federative Republic having commenced its existence at a
date anterior to any date material to the dispute between the parties to this appeal.
Therefore, the decree of the de facto Soviet government is valid and judgment must be
for James Sagor and Co. The judgment of the lower court is reversed.
BROWN CLAIM (UNITED STATES V. GREAT BRITAIN)
FACTS:
Brown, an American national who held concessions for gold mining in the
Transvaal, had been deprived of his rights through a pre-proclamation of the Boer
government in 1895. He brought a suit before the South African courts in 1897 and won,
but the government refused to honor the judgment. Following British annexation of the
Transvaal Republic, Brown pressed his case with the British authorities and was again
refused. Finally, Brown brought a further claim before the Great Britain United States
Claims Commission for denial of justice, arguing that as successor to the Boer
Republics, Britain was answerable for their delicts. Although the Commission agreed
that a denial of justice on the part of the South African authorities had indeed taken
place, it refused to hold Britain liable as successor.
ISSUE:
Whether or not Britain, as successor, should be liable for the acts committed by
South African authorities
RULING:
No. As stated by the court, We are equally clear that South African liability never
passed to or was assumed by the British Government. Neither in terms of peace
granted at the time of the surrender of the Boer Forces nor in the Proclamation of
Annexation can there be found any provision referring to the assumption of liabilities
of this nature The contention of the American Agent amounts to an assertion that a
succeeding State acquiring territory by conquest without any undertaking to assume
such liabilities is bound to take affirmative steps to right the wrongs done by the former
state. We cannot indorse this doctrine.
THE SCHOONER EXCHANGE (UNITED STATES SUPREME COURT)
FACTS:
McFaddon and Greetham owned a schooner named 'Exchange'. While sailing in
international waters, the ship was commandeered by the French Navy and turned into a
French warcraft. The French Navy did not bother to ask McFaddon and Greetham's
permission or pay them any money for their ship. Later, the Exchange (now renamed
the Balaou and flying a French flag) docked in Philadelphia. McFaddon and Greetham
sued in US court for return of their ship. The Trial Court found for the French, McFaddon
and Greetham appealed. The Appellate Court reversed. The French appealed.
ISSUE:
Whether or not national ships of war have been exempted by the consent of the
power of the friendly jurisdiction whose port the ship enters
RULING:
Yes. National ships of war are viewed as been exempted by consent of the power
of the friendly jurisdiction whose port the ship enters. A nations jurisdiction within its
sovereign territory is exclusive and absolute. The Exchange been a public armed ship,
currently under the control and supervision of a foreign power, who at the time of the
ships entry into the United States territory, was at peace with the United States, must
be viewed as having entered the states territory under an implied promise that while in
such environment, would be exempt from the jurisdiction of the country.
The US Supreme Court reversed and found that US courts did not have
jurisdiction over foreign-flagged vessels in US ports. The Court found that a warship
"constitutes a part of the military force of her nation; acts under the immediate and direct
command of the sovereign; is employed by him in national objects. He has many and
powerful motives for preventing those objects from being defeated by the interference of
a foreign state. Such interference cannot take place without affecting his power and his
dignity. The implied license therefore under which such vessel enters a friendly port,
may reasonably be construed, and it seems to the Court, ought to be construed, as
containing an exemption from the jurisdiction of the sovereign, within whose territory
she claims the rites of hospitality."
The absolute form of sovereign immunity from judicial jurisdiction was implicated
in this case. Three principles were brought forward by the court in this case; the
immunity that all civilized nations allow to foreign ministers; the exemption of the person
of the sovereign from arrest or imprisonment within a foreign country; and when a
sovereign permits troops of a foreign prince to pass through his territory, such sovereign
is understood to mean he has ceded a portion of his territorial jurisdiction.
