Foreign Sovereign Research Articles

Emitting Injustice? Foreign State-Owned Enterprises That Cause Transboundary Pollution and the Foreign Sovereign Immunities Act of 1976

This Note presents an analysis of whether the Foreign Sovereign Immunities Act of 1976 (FSIA) provides immunity from suit in U.S. courts for foreign state-owned enterprises (SOEs) when those entities cause trans-boundary pollution with effects inside the borders of the United States. Foreign SOEs around the world are uniquely involved in the energy sector, which makes them a very likely class of defendants in cases involving trans-boundary pollution. However, it is possible that under the FSIA foreign SOEs are protected from the jurisdiction of U.S. courts. While the activities of SOEs that result in trans-boundary pollution seem to be commercial in nature and therefore fall under the commercial activity exception to the FSIA, a number of cases hold that, to varying extents, activities involving the exploitation of natural resources are sovereign in nature and therefore protected by the FSIA. In this Note, I argue that because the relevant case law is ultimately based on the right of states to control their natural resources under international law, the application of such cases should be limited when that international legal right is also limited. Because international law balances control over natural resources with an obligation to not cause trans-boundary harm, I argue that acts of foreign SOEs resulting in trans-boundary pollution should not be viewed as sovereign acts. Therefore, the commercial activity exception to the FSIA should apply in such cases, submitting foreign SOEs to the jurisdiction of U.S. courts.

Brief of Professors William S. Dodge and Maggie Gardner as Amici Curiae in Support of Respondents, Hungary v. Simon & Germany v. Philipp

This amicus brief of Professors William S. Dodge and Maggie Gardner was filed with the U.S. Supreme Court in support of respondents in Hungary v. Simon and Germany v. Philipp, two suits brought under the Foreign Sovereign Immunities Act’s expropriation exception for takings of property in connection with the Holocaust. The brief argues that the Supreme Court should not adopt the doctrine of prudential comity abstention urged by Hungary, Germany, and the United States. Federal courts have a fundament obligation to exercise the jurisdiction Congress has given them, subject to only limited exceptions. Prudential comity abstention, which weighs U.S. interests, the interests of foreign governments, and the adequacy of the foreign forum, is not a well-established doctrine of American law but was developed only recently by the Ninth and Eleventh Circuits. The doctrine is incompatible with the limits the Supreme Court has imposed on abstention. It is also highly discretionary and threatens to swallow up more narrowly circumscribed doctrines. If adopted in these cases, it would necessarily apply to private parties as well, with unpredictable consequences. But the Supreme Court need not adopt a new abstention doctrine because existing doctrines, including forum non conveniens, are sufficient to address comity concerns in cases like these.

Bolivarian Republic of Venezuela and Others v. Helmerich & Payne International Drilling Co. and Others

State immunity — Jurisdictional immunity — Expropriation — Whether property taken in violation of international law — Whether non-frivolous but incorrect argument sufficient to confer jurisdiction — Foreign Sovereign Immunities Act 1976 — Expropriation exception to immunity — Whether applicableExpropriation — Whether property taken in violation of international law — Foreign Sovereign Immunities Act 1976 — Expropriation exception to immunity — Whether applicable — Whether non-frivolous but incorrect argument sufficient to confer jurisdiction — The law of the United States

Against Fluency

Against Fluency Jianna Jihyun Park (bio) some fish do not have eyes.to sustain, they must eat everything. like water, a body of language is in constant flux.some of it stains.some of it cuts your ancestor's hair.some of it makes home out of new dress shoes. all of it dreams of containment. this is written in a language you call this language.this language is not your language. this fluency is enunciation of capitalof what flows, and does not.superfluous holds the tongue like hostage.the body saturates with contradictions.dictions that counter.encounter.mass. [End Page 66] the tongue paralyzes, withdraws.from the vacuum comes out another tonguethat looks like the first one but not quite. dream dimming voice lavender bloodoceanic ringing in your ear when you came homeyour clothes sniffed saline wind and turned stiff. mother doesn't recognize your tonguestopping short stumblingleaping over what remains unearthed, unearthable. this language is criminal.this language you bring hometuck into your cradlehum mermaid lullabiesthumbs wiping wet.your smiles are hiding teeth. when one language does not allow hold.does not allow utterance.the unattainability of this language becomes a form, a refuge.not all telling tells; the form insulates. [End Page 67] the nanny at your friend's house had a white smile.when you walked past the room one morningyou saw her staring into the nothingas if a country gone ghost.the baby played with letters on the floor, sucking on a pacifier. r = foreign sovereign slippery worthy (not quite love) roundabout cornering deviation split hair father wears a suit, ties r around his dry tongue. the woman enunciated "independence day"with all her chinas if her own.savor is not savior. this foreignness is intrinsic.to the man sitting next to you, you askwhose memory did you leave behind.he opens his mouth. stained teeth fall onto your palm.you bite your lip. [End Page 68] e is eruptiveergothis language. woori, naralike water in your closing handsthis language combs through, slips between the i's.our home becomes your own to remember. moment of enunciation—out the cage, fly fish. [End Page 69] Jianna Jihyun Park Hannah Sanghee Park is the author of The Same-Different, the 2014 winner of the Academy of American Poets Walt Whitman Award. "Plague" was originally written in 2016. Copyright © 2020 Pleiades and Pleiades Press

Republic of Sudan v. Harrison and Others

State immunity — Jurisdiction — Procedure — Service of process on foreign State — Foreign Sovereign Immunities Act 1976 — Section 1608 — Service of process on minister of foreign affairs — Whether service at embassy of foreign State constituting adequate service — Whether service of process must be mailed to foreign minister in foreign State — Service via embassy of foreign StateDiplomatic relations — Vienna Convention on Diplomatic Relations, 1961 — Article 22 — Inviolability of embassy premises — Whether service of process at embassy premises interfering with inviolability of embassy premises — The law of the United States

Interest Rate Parity with Credit Risk: Implications for Carry Trades

The incredible profitability of the carry trade over the past six decades constitutes a puzzle for interest rate parity. Contrary to recent behavioral or friction-based approaches that explain deviations from traditional interest rate parity, I derive interest rate parity in a general arbitrage pricing model of foreign exchange with credit-risky sovereign lending and sharp currency devaluations associated with default; in particular, foreign sovereign credit risk makes forward contracts more valuable relative to standard covered interest rate parity. I calibrate the model for Mexico and the United States, and find that credit risk and currency devaluation fully account for the profitability of both the covered and uncovered carry trade. Modest default probabilities are sufficient to explain deviations from covered interest rate parity for G10 countries. I find support for the recent notion that the United States is a global provider of safe assets, via default intensities implied by currency forward contracts.

Jam v. International Finance Corp.

In Jam v. International Finance Corp., the U.S. Supreme Court held that the International Organizations Immunities Act of 1945 (IOIA) affords international organizations (IOs) the same immunity from suit in U.S. courts that foreign governments currently enjoy under the Foreign Sovereign Immunities Act of 1976 (FSIA), which codifies the restrictive theory of foreign sovereign immunity. The International Finance Corporation (IFC) had argued that the IOIA, which grants international organizations the “‘same immunity’ from suit … ‘as is enjoyed by foreign governments’” (p. 15), should be understood to provide international organizations with absolute immunity, which it argued foreign governments enjoyed prior to the United States’ explicit adoption of the restrictive theory in 1952. Under the restrictive theory, a foreign state is immune from suit for its sovereign acts (acta jure imperii), but not for its commercial acts (acta jure gestionis). By interpreting language in the IOIA as granting the “same immunity” to international organizations as foreign governments enjoy at the time the suit is filed, the Supreme Court aligned the regime for IO immunity with that of foreign state immunity, except in cases where the IO's founding charter provides a different rule or where the executive branch has explicitly limited immunity. It remains to be seen what IO activities are deemed “commercial” under this regime and what types of transactions are found to have a sufficient nexus to the United States to fall within the FSIA's commercial-activity exception.

D.C. District Court Enters Over $300 Million Default Judgment Award Against Syria for the Death of Marie Colvin

On February 1, 2019, the United States District Court for the District of Columbia granted a motion for default judgment and entered a $302,511,836.00 award against the Syrian Arab Republic (“Syria”). The court found the Syrian government liable for the death of Marie Colvin, who died in an artillery shelling on February 22, 2012, at a media center in the city of Homs. Colvin was a heralded war correspondent who had previously “cover[ed] conflict zones in Iraq, Chechnya, the Balkans, East Timor, Sri Lanka, Sierra Leone, and Libya.” Colvin's heirs brought suit, claiming that because Syria had been designated a “state sponsor of terrorism,” it could be held liable for an extrajudicial killing of a U.S. national under the Foreign Sovereign Immunities Act (FSIA). Judge Amy Berman Jackson concluded that the plaintiffs met the evidentiary burden required to support their claim after finding personal and subject matter jurisdiction.

Jam v. International Finance Corp. (U.S. Sup. Ct.)

On February 27, 2019, the U.S. Supreme Court issued an opinion in Jam v. International Finance Corp., a case of critical importance for international organizations. The question presented in Jam was whether U.S. law affords international organizations absolute immunity from suit in the United States, or whether international organizations instead are entitled to only the more limited or “restrictive” immunity that applies to foreign sovereigns under the Foreign Sovereign Immunities Act.

White Paper: Antitrust Analysis of NOPEC Legislation

This White Paper analyzes the proposed “No Oil Producing and Exporting Cartels Act of 2019” (NOPEC). This legislation, which has been introduced in the United States Senate and House of Representatives, addresses the antitrust issues involved in allowing the Department of Justice to sue the Organization of the Petroleum Exporting Countries (OPEC), their member states, their state owned oil companies (SOEs), nonmember states and their SOEs, and private companies for their participation in an international cartel that has long been involved in regulating the production and distribution of oil and other petroleum products. The White Paper begins with a background discussion of the participants in the oil cartel. The paper then describes in detail the proposed legislation. The paper discusses how prior suits against OPEC have failed as courts have applied several substantive law doctrines — comity, Act of State, and the Foreign Sovereign Immunities Act — as well as rules on service of process under the Federal Rules of Civil procedure, to turn away the four private cases that have been filed. The paper then addresses how NOPEC is directed at removing the substantive defenses that have blocked the private party litigation and that might block litigation filed by the Justice Department. The bill removes the substantive law blocks, although an issue might remain if the Department brings a criminal prosecution, but NOPEC does not address the procedural issue of service of process. The White Paper concludes that NOPEC is an important part of a worldwide effort to stop international cartels that harm consumers and reduce economic welfare.

Derailing State Immunity: A Broad-Brush Approach to Jurisdiction under Claims for the Expropriation of Cultural Property

Abstract:The following article considers the approach taken by the courts of the United States in claims concerning issues of state immunity and private international law with respect to the expropriation and restitution of cultural property, primarily in the context of Nazi Germany. It can be seen that the US courts have interpreted the provisions under the Foreign Sovereign Immunities Act so as to significantly widen the scope for individuals to bring claims against states and state entities in circumstances where the case, and the property concerned, has little or no connection with the jurisdiction and which at their core are domestic disputes.

International Trade, Sovereign Default and Jurisdictional Immunities

Environment of international trade is shaped by both economic and social factors. Legal framework may influence the trade by both those channels simultaneously by changing contract terms directly and by influencing conduct of parties to a transaction. This is the case of jurisdictional immunities – a legal institution with a potential of threatening the very fundaments of the free market economy: the sanctity of contracts. Shielding States from private claims abroad had been conceived as a means of protecting national dignity and preventing unjustified intrusion by domestic courts into foreign Sovereign’s internal affairs. Gradual increase of public activity in the economic field produced, however, a perverse effect. In case of international trade an immunity from jurisdiction may prevent a private party from enforcing its contractual rights against a foreign State. In terms of international financial transactions immunity veil prohibits lenders from recovering the debt. Originally this was perceived as a domestic problem of the State concerned (and of the private party thus suffering a loss). This changed, however, due to ever tighter global economic integration. Without entering into details behind the indebtedness crisis in the European Monetary Union , crisis eventually curtailed any doubts as to the “domestic character” of one’s fiscal stability, at least between members of a monetary integration zone. This, paradoxically, may be a counterbalance for the “immunity weakness”, as breach of a contract entails both direct and indirect (investors and the public) consequences for numerous market actors. On the contrary legal instruments that shield States from both their trading partners and lenders may render both areas of public activity even more interdependent. While considering any changes in this area one shall thus seek: - confidence-building measures, - to limit spillovers, - to stem capital outflow, - and to provide credible tools for crisis management. The question key question of why sovereigns repay their debts is a decisive factor in terms of severity of any confidence crisis.

Courts as Information Intermediaries: A Case Study of Sovereign Debt Disputes

When foreign sovereigns default on their debt, creditors sometimes sue them. These creditors are sophisticated actors, and they sue even though courts can do little to force a sovereign to satisfy a judgment. Why do they sue? This Article argues that courts serve as information intermediaries that strengthen reputational enforcement in the international sovereign debt market. It shows, through a case study of sovereign debt defaults and disputes, three ways in which courts play this role. First, in hard cases, courts clarify reputational signals by publicly determining whether breach occurred. Second, through discovery and fact finding, they mitigate information asymmetries concerning aspects of sovereign behavior during default that are difficult to monitor. Third, they provide a forum for shaping the norms by which behavior is judged. The sovereign debt market thus relies on a hybrid of legal and nonlegal enforcement. Parties appeal to the law to determine rights and detect bad behavior. At the same time, they depend on reputation to discourage violations. Contracts scholars debate the extent to which nonlegal mechanisms such as reputation can support trade. Recognizing that courts can function as information intermediaries implies that courts can expand the range of markets that reputation can support. Under certain conditions, courts can supplement legal remedies by transmitting accurate and credible information about market participants’ expectations and behavior.

The Extraterritorial Application of Post-Judgment Discovery under the U.S. Foreign Sovereign Immunities Act

미국 외국주권면제법은 외국정부에 대한 주권면제와 주권면제의 적용배제에 대해 규정하고 있다. 주권면제는 미국법원의 관할권으로부터의 면제와 판결집행에 대한 면제가 있다. 그러나 미국 내에 있는 외국정부의 재산이 상업적 활동으로 사용된 경우, 그 재산에 대해 외국정부는 집행에 대한 주권면제를 주장할 수 없다. 2014년 Republic of Argentina v. NML Capital, Ltd. 판결에서 미국 연방대법원은 아르헨티나 정부의 채무불이행 재판에서 승소한 미국 헤지펀드가 아르헨티나 정부의 재산에 대해 집행하기 위해, 아르헨티나 정부의 미국 국내 재산은 물론 국외 재산에 대한 정보를 수집하고자 제3자 은행에게 재산정보를 제공할 것을 요청하는 하급심 법원의 개시절차 소환장을 허가하였다. 외국주권면제법의 해석과 적용에 관한 위 판결은 향후 투자자-국가 분쟁(ISD)에서 만약 외국 투자자가 외국(또는 한국) 정부에 대해 승소하고, 중재판정에 대한 승인 및 집행 판결을 미국 법원에서 결정할 경우, 외국주권면제법에 의해 외국 투자자가 외국(또는 한국) 정부의 국내외 재산에 대한 광범위하게 집행 또는 적어도 재산에 대한 정보를 요구할 수 있음을 시사하는 판결로 향후 이 판결에 대한 평가나 적용이 어떻게 진행되는지 파악하는 것이 필요하다.The United States Foreign Sovereign Immunities Act ( FSIA ) contains provisions of exceptions to jurisdictional and execution immunity of a foreign state. In Republic of Argentina v. NML Capital, Ltd., the United States Supreme Court interpreted the immunity exceptions under the FSIA broadly and even applied extraterritorially. The Court in NML did not limit power of the U.S. court to order post-judgment discovery to search for the assets around the world of the judgment debtor, Argentina. The decision in NML may significantly affect later FSIA cases to enforce the judgment of a court in the U.S. against a foreign state because this case approved the broad discovery order of the U.S. court to enforce judgment execution of judgment creditors on the property of judgment debtors, in the United States or abroad. The judgment execution on the assets abroad under the FSIA expands the scope of the Act extraterritorially. To grasp the rules on execution under the FSIA, this paper reviews the FSIA s execution immunity and its exceptions, focusing on issues related to judgment execution against a foreign state. The paper analyzes the rationale of the Court in NML to find out how the judgment execution and its exception under the FSIA had been applied. Although the NML Court discussed the questions on discovery in the post-judgment discovery proceedings, it can be a good reference to see how the execution exceptions under the FSIA to judgment execution in the future will be interpreted, especially in any recognition and enforcement judgment related to the Investor-State Disputes in the U.S. court.

El-Hadad v. United Arab Emirates and Embassy

State immunity — Jurisdictional immunity — Restrictive immunity — Proceedings with respect to employment contract — Whether United Arab Emirates immune from suit — Foreign Sovereign Immunities Act 1976 — Section 1605(a)(2) — Commercial activity exception — Whether applicable — Whether plaintiff civil servant under Act — Whether plaintiff’s work involving exercise of distinctly governmental powers — Nature of work — Irrelevance of purpose — Whether Act shielding United Arab Emirates from suit — The law of the United States

Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd.

When a foreign country's law is relevant to a case in U.S. federal court and the foreign country files an official statement about the meaning of its law, how should U.S. courts treat the foreign government's representations? In Animal Science Products, Inc. v. Hebei Welcome Pharmaceuticals Co., the Supreme Court of the United States held that “[a] federal court should accord respectful consideration to a foreign government's submission, but is not bound to accord conclusive effect to the foreign government's statements.” In so doing, the Supreme Court settled a disagreement between the courts of appeals and reversed an opinion of the Second Circuit that had given conclusive effect to the Chinese government's representations about its domestic law. Animal Science Products provides important guidance to federal courts faced with increasingly frequent filings by foreign governments, but it leaves unresolved significant questions about deference to foreign sovereign amici and preserves existing debates about the nature of “respectful consideration.”

Restrictive Foreign Sovereign Immunity in the United Kingdom (UK): A Welcome Development in International Commercial Transactions

The doctrine of absolute foreign State immunity to a great degree, appeared to stifle commercial transactions between contracting State parties and the private sector. Statute and earlier case law both attest to the absolute immunity of foreign States from the English courts’ jurisdiction. However, latter dicta of the English courts under the UK State Immunity Act 1978 (SIA 1978), successfully made a distinction between instances where a State’s actions were wholly of governmental character and some actions of the government that appeared commercial in nature, with basically features, similar to normal commercial transactions entered into by private individuals and companies. This paper, after a careful and painstaking overview of recent cases, concludes that the drift towards restrictive foreign State immunity by the English courts with respect to commercial transactions entered into by States, is a healthy development that carries the advantage of creating greater transparency, which in turn gives assurance to private individuals and companies that the State could be held liable for a breach of its commercial contractual obligations. Without this development, governments such as the Chinese government, which is basically operating as a “commercial/business conglomerate”, can argue State immunity in disputes involving commercial transactions entered into between the Chinese government and the private sector. This research, would in no small way, encourage private individuals and companies to enter into commercial transactions with sovereign States without hesitation, safe in the knowledge that the UK courts, are ready and willing to hold contracting State parties in commercial transactions, accountable.

Selected US Tax Developments: Avoiding the "Commercial Activity" Traps for Foreign Sovereigns Investing in US Real Estate

US tax laws include a favourable exemption for certain types of US income earned by foreign sovereigns and their controlled entities. Unfortunately, however, there are a number of traps relating to the conduct of commercial activities. The applicable rules are not always intuitive, or even rational, so careful planning is needed.

A more targeted approach to foreign direct investment: the establishment of screening systems on national security grounds

The process of liberalization of international trade and of Foreign Direct Investment (FDI) has constituted a broadly accepted trend during the last few decades and FDI inflows have expanded constantly since the end of the 1980’s. However, signs of a certain crisis of the positive and one-way attitude towards international trade and FDI exist nowadays. The increase in the flux of FDI coming from developing and emerging countries to developed economies, the sudden relevance of foreign sovereign investors, the changing environment for national security or the quest to protect technologies and sectors of the economy considered vital for the host country, its sovereignty and competitiveness are creating a new reality that impacts on both, the global fluxes of FDI and its regulation. Tension exists between the commitment towards freedom of FDI and the right of the state to ensure that certain legitimate public interests and goals can be fully implemented. This may lead to the protection of certain strategic sectors of the economy of the country or flagship firms from foreign investment on national security or related grounds. The current revision of the great paradigms on which FDI, and its legal framework, stand is ascertainable in the growing recourse by states to the development of some measures devoted to prevent the entrance of FDI in the country under certain circumstances.

Protection of Private Property in the Early Law of Nations

The article analyses the protection of private property under the law of nations during the 18th and early 19th centuries. It shows how natural law theories of property were influential in shaping a doctrine of private property under the law of nations, relying on a dual conception of private property as both individual and state rights. This mirrored developments in the real world, where a network of treaties granted protection to foreign property and commercial interests. However, in practice the most important exposure of private property to the power of foreign sovereigns was the disruption of shipping and the constant risk of merchant ships being seized by privateers in the service of belligerent powers. The law of nations regulated this practice through the law of prize and neutrality, a main function of which, it is argued here, was to protect individual, foreign property rights.