Foreign Sovereign Immunity

Case: Victory Transport, Inc. v. Comisaria General (1965)

336 F.2d 354, 381 U.S. 934

Facts: Owner of a cargo ship wants to sue the Spanish Ministry of Commerce in
U.S. court. Govt 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.

Reasoning:
○ Court acknowledges that there has been a great deal of deference to the
idea of foreign sovereign immunity in our history, and specifically points to The
Schooner Exchange as an example of this. However, the reasons we had this in the
past don't really apply anymore.
o The doctrine originated in an area of personal sovereignty, where a
king could do no wrong, and if one sovereign exercised authority over another it
indicated hostility or superiority. Now, though, the sovereignty is a public
function, so that previous explanation no longer has much import.
o Modern trend is to abandon it in lieu of the restrictive theory.
Court discusses several treaties that basically limit immunity to back this up (pg
835, 1st full paragraph).
□ int'l /comparative developments. Shift in social reality. More
int'l transactions.
○ The test the court uses is the restrictive theory of immunity, recognizing
immunity for a foreign state's public or sovereign acts (jure imperii), but
denying immunity to a foreign state's private or commercial acts (jure gestionis).
[Tate Letter]
o Purpose of restrictive theory
□ To try to accommodate the interest of individuals doing
business w/ foreign govts in having their legal rights determined by the court,
with the interest of foreign govts in being free to perform certain political acts
w/o undergoing the embarrassment or hindrance of defending their actions before
foreign courts.
o What are public or sovereign acts? (jure imperii) usually limited to:
□ Internal administrative acts, such as expulsion of an alien
□ Legislative acts, such as nationalization
□ Acts concerning the armed forces
□ Acts concerning diplomatic activity
□ Public loans
○ Using this analysis on this case (public or private):
o Spain's chartering of the ship was not strictly a public or political
act. It's more like a private commercial act.
o Why might it be Private?:
□ K had an arbitration clause
□ Maritime transport has been included among commercial or
business activities that restrict sovereign immunity (from U.S. treaties, and also
the 1926 Brussels Convention) int'l /comparative developments
□ Buying and selling of wheat - even if no profit involved, looks
like a private commercial transaction

RULE: The modern trend is to use the restrictive theory of immunity, recognizing
immunity for a foreign state's public or sovereign acts (jure imperii), but
denying immunity to a foreign state's private or commercial acts (jure gestionis).

Notes and Questions:

· Tate Letter - inaugurated the restrictive doctrine in U.S. law
Notes

· The doctrine, as in Schooner, is no longer absolute

· If a private, commercial act, then not immune.
· There is a presumption against foreign sovereign immunity unless factors present
that show public act, or unless there's a letter from state dept recommends
sovereign immunity