Upload
mrvirgines
View
5
Download
2
Embed Size (px)
DESCRIPTION
Digest of the case Banco National de Cuba v. Sabbatino
Citation preview
BancoNacionaldeCubav.SabbatinoBriefFactSummary.ThebillsofladingforashipmentofsugarcontractedbetweenFarr,Whitlock&CoanAmericancommoditiesbrokerwasassignedbyBancoNacionaldeCuba(P),butanotherCubanbankinstitutedthisactionallegingconversionofthebillsofladingandsoughttorecovertheproceedsthereoffromFarrandtoenjoinSabbatino(D),acourt-appointedreceiverfromexercisingcontroloversuchproceeds.SynopsisofRuleofLaw.Thejudiciary,inlinewiththeActofStateDoctrinewillnotexaminethevalidityofatakingofpropertywithinitsownterritorybyaforeignsovereigngovernmentrecognizedbythiscountryintheabsenceofinternationalagreementstothecontrary,evenifthetakingviolatescustomaryinternationallaw.Facts.AcontracttopurchaseCubansugarfromawhollyownedsubsidaiaryofCompaniaAzucareraVertientes-CamaqueydeCuba(CAV)acorporationorganizedunderCubanlawwasmadebyFarr,Whitlock&Co.(Farr)anAmericancommoditiesbroker.TheCAVstockwasprincipallyownedbyUnitedStatesresidents.TheagreementwasforFarrtopayforthesugarinNewYorkuponthepresentationoftheshippingdocuments.Afterthisdeal,alawwasenactedinCubawhichempoweredthegovernmenttonationalizeforcefully,expropriationofpropertyorenterpriseinwhichAmericannationalshadaninterest.Hence,thesugarwhichFarrhadcontractedwasexpropriatedfromCompaniaAzucarera.FarrhoweverenteredintocontractswhichwassimilartotheonemadewithCAVwiththeBancoParaelComerciodeCuba,whichwasaninstrumentalityofthegovernment.ThiswasdonebyFarrinordertoobtainconsentfromtheCubangovernmentbeforeashipcarryingsugarcouldleaveCuba.AbillofladingwhichwasalsoaninstrumentalityoftheCubangovernmentwasassignedbythebanktoBancoParaelComerciodeCuba,whopresentedthebillsandasightdraftasrequiredunderthecontracttoFarrinNewYorkinreturnforpayment.AfterCAVnotifiedFarrofitsclaimtotheproceedsasrightfulownerofthesugar,Farrrefusedthedocuments.
ThisactionofFarrresultedinacourtorderwhichappointedSabbatino(D)asreceiverofCAVsNewYorkassetsandenjoineditfromremovingthepaymentsfromthestate.BasedontheallegationoftheconversionofthebillsofladingseekingtorecovertheproceedsthereoffromFarrandtoenjoinSabbatino(D),thereceiverfromexercisingdominionoversuchproceeds,theBancoNacional(P)institutedthisaction.AsummaryjudgmentwasgrantedagainstBancoNacional(P)bythedistrictcourtonthegroundsthattheActofStateDoctrinedoesnotapplywhentheforeignactinquestionisinviolationofinternationallaw.Thecourtofappealsalsoupheldthisjudgment.
Issue.Doesthejudiciaryhavetheauthoritytoexaminethevalidityofatakingofpropertywithinitsownterritorybyaforeignsovereignevenifthetakingviolatedinternationallaw?Held.(Harlan,J).No.Thejudiciary,inlinewiththeActofStateDoctrinewillnotexaminethevalidityofatakingofpropertywithinitsownterritorybyaforeignsovereigngovernmentrecognizedbythiscountryintheabsenceofinternationalagreementstothecontrary,evenifthetakingviolatescustomaryinternationallaw.Eveninasituationwherebyinternationallawhasbeenviolated,theclearimplicationofpastcasesisthattheActofStateDoctrineisapplicablebecausetheActofStatedoctrinedoesnotdeprivethecourtsofjurisdictiononceacquireoveracase.Thedamagesofadjudicatingtheproprietyofsuchexpropriationacts,regardlessofwhethertheStateDepartmenthasitdidinthiscase,assertedthattheactviolatedinternationallawaretoofar-reachingforthejudicialbranchtoattempt.Hencethejudgmentofthecourtofappealsisreverseandthecaseremandedbacktothedistrictcourt.
Dissent.(White,J).AmericancourtsarenotrequiredbytheActofStateDoctrinetodecidecasesindisregardofinternationallawandoftherightsoflitigantstoafulldeterminationonthemerits.Discussion.Eveninthediversityofcitizenshipcases,theCourtconcludedthattheActofStateDoctrinemustbedeterminedaccordingtofederalratherthanstatelaw.Thecourtalsomadeitclearthatitisconstrainedtomakeitclearthatanissueconcernedwithabasicchoiceregardingthecompetenceandfunctionofthejudiciaryandnationalexecutiveinorderingourrelationshipswithothermembersoftheinternationalcommunitymustbetreatedexclusivelyasanaspectoffederallaw.