1 See Bank of Ethiopia v. National Bank of Egypt and Liguori, [1937] 1 Ch. 513, this Journal, Vol. 31 (1937), p. 742; Haile Selassie v. Cable and Wireless, Ltd. (No. 1), [1938] 1 Ch. 545, reversed by Court of Appeal, [1938] 1 Ch. 839, [1938] 3 All E. R. 384, this Journal, Vol. 33 (1939), p. 580.

2 59 Ll. L. Rep. 1.

3 Ibid., 47; [1937] 4 All E. R. 313 (Greer, Slesser, Scott, L. JJ.).

4 In the Court of Appeal, Scott, L. J., said: “. . . The simplest way of stating the position is that before the writ was issued in this case, this vessel was already in the actual possession of the Spanish Government. Consequently that possession could not be displaced without an order of the Court upon the Spanish Government. That order . . . could not be made unless the Spanish Government consents that it should be made. It does not so consent, and the Court has, therefore, no jurisdiction in the matter, and must, in accordance with the rule of comity, set aside the writ as was done by Mr. Justice Bucknill.” 59 LI. L. Rep. 47, at p. 50.

In the judgment of Greer and Slesser, L. JJ., the case was governed by the decision in The Jupiter (No. 1), [1924] P. 236. The facts of this case were that the Jupiter, a vessel belonging to a Russian company, was at Odessa in 1918 when Soviet decrees nationalizing Russian ships were issued. The ship subsequently left that port under control of her original owners and engaged in trade to various ports outside Russia. In 1924, while the Jupiter was laid up at Dartmouth, the master, acting without authorization from the owners, handed over possession of the vessel to the Trade Delegation of the U.S.S.R. The owners then issued a writ in rem against the “Jupiter and all persons claiming any right or interest in the said steamship.” The U.S.S.R. moved to set aside the writ. The Court of Appeal, affirming an order of Hill, J., granted the motion on the ground that the issue of the writ against a vessel in which a foreign sovereign state claimed an interest was in effect impleading that state. Scrutton, L. J., said: “ I think that the law is accurately stated by Mr. Dicey. He says: ‘The Court has no jurisdiction to entertain an action against any foreign sovereign. Any action against the property of a foreign sovereign is an action or proceeding against such person’: Conflict of Laws, 3rd ed., p. 215. On that ground, without going into any discussion as to whether the claim [of the Soviet Government to possession and ownership of the ship] is right or wrong, . . . this particular method appears to me to violate the principles of international comity and to make a foreign sovereign appear in these Courts as defendant to defend what he alleges to be his property.” [1924] P. 236, at p. 243.

5 See 19 British Year Book of International Law (1938), p. 243.

6 Compañía Naviera Vasamgada v. S. S. Cristina, [1938] A. C. 485; [1938] 1 All E. R. 719; this Journal, Vol. 32 (1938), p. 824 (Lord Atkin, Lord Thankerton, Lord Macmillan, Lord Wright and Lord Maugham), decided March 3, 1938.

For comment, see H. Lauterpacht, “The Cristina,” 54 Law Quarterly Review (1938), pp. 339–344; F. A. Mann, “Immunity of Sovereign States,” 2 Modern Law Review (1938), pp. 57–62; R. Y. Jennings, “Recognition and Sovereign Immunities,” ibid., pp. 287–291; A. B. Keith, “The Jurisdiction of British Courts over Foreign Sovereigns,” 50 Juridical Review (1938), pp. 179–188; and Jaenicke, , “Die Frage der Immunität in der Rechtsprechung zum spanischen Bürgerkrieg,” Zeitschrift für ausländisches öffentliches Recht und Völkerrecht, IX (1939), pp. 354–363 Google Scholar.

7 Per Lord Atkin, [1938] A. C. 485, at p. 490; also Lord Wright, ibid., p. 503.

8 In holding that an action in rem brought under a claim for collision damage done by a Belgian state mail packet impleaded the sovereign owner, Lord Justice Brett said: “[The Bold Buccleugh (7 Moo. P. C. 267)] decides that an action in rem is a different action from one in personam and has a different result. But it does not decide that a court which seizes and sells a man’s property does not assume to make that man subject to its jurisdiction. To implead an independent sovereign in such a way is to call upon him to sacrifice either his property or his independence. To place him in that position is a breach of the principle upon which his immunity from jurisdiction rests. We think that he cannot be so indirectly impleaded, any more than he could be directly impleaded. The case is, upon this consideration of it, brought within the general rule that a sovereign authority cannot be personally impleaded in any court.” 5 P. D. 197, at p. 219.

9 [1938] A. C. 485, at pp. 504–505; also Lord Atkin, ibid., pp. 491–492.

Lord Maugham doubted whether a foreign government is impleaded personally by an action in rem against a vessel in its possession, other than a ship of war or other vessel publicis usibus destinata. Citing Sir Robert Phillimore’s judgment in The Parlement Belge, 4 P. D. 129 (reversed by Court of Appeal, 5 P. D. 197), he considered that in such a case nothing more “is sought, or, at any rate, can be obtained, than a remedy against the res.” In the present case, however, immunity must be sustained, since the Cristina, under the exceptional conditions of civil war, was unquestionably “within the description publicis usibus destinata.” Ibid., pp. 520–521.

10 Lord Thankerton: “Further, the order sought in the present case would necessarily displace the de facto possession of the Spanish Government, and I agree . . . that the doctrine of immunity of the property of a foreign sovereign State dedicated to public purposes includes the case of actual possession for public uses.” [1938] A. C. 485, at p. 493.

Lord Macmillan: “ . . . This action, which is directed to take—ultimately, if necessary, by force—a Spanish ship requisitioned for public purposes by the duly recognized Government of Spain and lying in a British port out of the possession of that Government, cannot be allowed to proceed in the Courts of this country.” Ibid., p. 498. Also, Lord Wright, ibid., p. 506.

Even if immunity from jurisdiction were held not to exist in the present case, immunity from execution would remain. Cf. Duff Development Company, Ltd. v. Government of Kelantan, [1924] A. C. 797.

11 [1938] A. C. 485, at p. 502.

12 Ibid., p. 507; also Lord Atkin, p. 492. In the opinion of Lord Wright, requisition alone would not constitute a ground for immunity, although F. A. Mann has suggested the contrary (2 Modern Law Rev. (1938), p. 58). “The word ‘requisition,’” Lord Wright said, “while not a term of art, is familiar and has been constantly used to describe the compulsory taking by Government, invariably or at least generally, for public purposes of the user, direction and control of the ship with or without possession.” Ibid., p. 502.

See The Broadmayne, [1916] P. 64; The Messicano, 32 T. L. R. 519; The Crimdon, 35 T. L. R. 81; and The Eolo, [1918] 2 I. R. 78.

13 [1924] P. 236, especially the judgment of Scrutton, L. J. In The Jupiter (No. 3), [1927] P. 122, at p. 138, Hill, J., expressed the following dictum: “ . . . Where jurisdiction is invited over property in this country as, for instance, by a writ in rem, the declaration of the foreign sovereign that the property is his must be accepted, for to investigate the truth of that declaration would be to determine the very question which is in issue, and to exercise jurisdiction over the foreign sovereign, which the Court cannot do against the will of such sovereign.”

14 [1938] A. C. 485, at p. 506.

15 Ibid., p. 516. Immunity applies only to property which is admitted or proved to belong to, or to be in the possession of, a foreign government; if it is in the hands of a third party, J the mere assertion of claim by a foreign government will not oust the jurisdiction of the court. “‘ Ibid., p. 517. “ It would be a strange result if a person claiming property in the hands of, or a debt alleged to be due by, a private individual in this country were to be deprived of his right to have his claim adjudicated upon by the Courts merely because a claim to the property, or the debt, had been put forward on behalf of a foreign sovereign. Such a claim can be ‘ adjudicated upon without impleading the foreign sovereign either directly or indirectly.” Greene, M. R., in Haile Selassie v. Cable and Wireless, Ltd., [1938] 1 Ch. 839, at p. 845. Cf. The Jupiter (No. 2), [1925] P. 69; The Jupiter (No. 3), [1927] P. 122.

16 59 LI. L. Rep. 47, at p. 50.

17 [1938] A. C. 485, at p. 509. Lord Maugham agreed that immunity applied to property in a sovereign’s possession whether “rightly or wrongly,” but considered that claims with respect to property seized in England “without any shadow of right . . . ought to be scrutinized with the greatest care.” Ibid., at pp. 515, 517.

18 Lord Thankerton, ibid., p. 493; Lord Maugham, ibid., p. 514.

19 See Thomas Baty, “Foreign Sovereigns,” this Journal, Vol. 33 (1939), p. 351. The enforcement of a decree of requisition in foreign waters would seem to involve no violation of the local sovereignty, provided that possession is gained without the use of violence. It may be argued that this is included among the recognized consular functions relating to the application of the law of the flag state to questions of personnel and the internal management of national ships. With these functions the local authorities will ordinarily not interfere, so long as no breach of the peace occurs. The power of a consul to enforce a decree of requisition upon a national ship, therefore, would seem to depend upon his ability to get his order obeyed peacefully. See 19 Br. Yr. Bk. Int. Law (1938), p. 245, note 1.

In cases where the vessel is under arrest, the parties may not, of course, interfere with the possession of the court. This was decided by the Court of Appeal on Feb. 22, 1939, in the case of The Abodi Mendi, [1939] P. 178. The Spanish Government had issued a writ against the Abodi Mendi, a Bilbao ship lying at Cardiff, and the owners had entered an appearance. Before the hearing in the proceedings, the Spanish Government gave notice of discontinuance of the action. The owners agreed to the release of the vessel, but withdrew their consent when they learned that the master who held possession for them had on the previous day “left the ship for a walk,” and, upon his return, had found the gangplank drawn up against him, and the vessel in the possession of the crew on behalf of the Spanish Government. Under cover of the arrest and the release combined, the Spanish Government sought to make its claim effective without gaining a judgment in its favor. Once in de facto possession, it intended to rely upon the decision in The Cristina to prevent any further action by the owners. The court held that such “high-handed action” was a contempt of court, and ordered that the arrest be continued until the master appointed by the owners had been permitted to return on board.

20 [1920] P. 30. See the remarks of Lord Thankerton, [1938] A. C. 485, at p. 494; of Lord Macmillan, ibid., pp. 497, 498; and of Lord Maugham, ibid., pp. 519–523. Lord Wright, while noting the justified criticism of the immunity of government vessels engaged in commerce, considered that in England the rule of absolute immunity was established. He pointed out that even if the International Convention for the Unification of Certain Rules concerning the Immunity of State-Owned Ships, signed at Brussels, April 10, 1926, were in effect, it might not affect claims to possession, as in the present case, but only claims in respect of the operation of such ships or in respect of the carriage of cargoes in them. Ibid., p. 512. See H. Lauterpacht, in 54 Law Quarterly Rev. (1938), pp. 340–343; and F. A. Mann, in 2 Modern Law Rev. (1938), pp. 59–61.

21 Lord Wright, [1938] A. C. 485, at p. 501.

22 Banco de Bilbao v. Sancha; Same v. Rey, [1938] 2 K. B. 176; [1938] 2 All E. R. 253. The issue in this case concerned the effect to be given to conflicting decrees of the Republican and Nationalist Governments with respect to the Banco de Bilbao, whose corporate home was in territory controlled by General Franco at the time the decrees were issued. According to a letter from the Foreign Office, dated Feb. 17, 1938, “His Majesty’s Government recognizes the Nationalist Government as a government which at present exercises de facto administrative control over the larger portion of Spain,” including all of the Basque Provinces. Ibid., p. 181; and see H. Lauterpacht, “The Form of Foreign Office Certificates,” 20 Br. Yr. Bk. Int. Law (1939), p. 126. Clauson, L. J., considering that the question in this case was settled by the principles laid down in Luther v. Sagor, [1921] 3 K. B. 532, and Bank of Ethiopia v. Bank of Egypt and Liguori, [1937] 1 Ch. 513, said: “ . . . This Court is bound to treat the acts of the government which His Majesty’s Government recognize as the de facto government of the area in question as acts which cannot be impugned as the acts of an usurping government, and conversely the Court must be bound to treat the acts of a rival government claiming jurisdiction over the same area, even if the latter government be recognized by His Majesty’s Government as the de jure government of the area, as a mere nullity, and as matters which cannot be taken into account in any way in any of His Majesty’s courts.” [1938] 2 K. B. 176, at p. 195.

The application of the above principles to the Banco de Bilbao case has been strongly criticized by Patrick Dean in 54 Law Quarterly Rev. (1938), pp. 479–480, on the ground that the true analogy to the position held by the Nationalist Government is not to be found in the decisions cited by Lord Justice Clauson, but in American cases such as Williams v. Bruffy, 96 U. S. 176; and Compañía Minera Ygnacio Rodriguez Ramos, S. A. v. Bartlesville Zinc Co., 115 Tex. 21. It is criticized on other grounds by Foster, John, “La théorie anglaise du droit international privé,” 65 Hague Academy Recueil (1938, III), p. 467 ffGoogle Scholar.

28 The Arraiz, 61 Ll. L. Rep. 39, at p. 42. Plaintiffs attempted to distinguish the case from The Cristina on the ground that the writ was in different form and was addressed, not to all parties interested, but only to the ship and the master. The court found no basis for the distinction, since the Republican Government had abundantly shown its interest in the res.

In an earlier case, the owners of a Spanish vessel, which had been requisitioned by the Republican Government while at a port under its control, had issued a writ for possession. Langton, J., set aside the writ, citing the decisions of Bucknill, J., and of the Court of Appeal in The Cristina, and pointing out that this was “an a fortiori case for possession from the point of view of the Spanish Government.” The Rita Garcia, 59 LI. L. Rep. 140. Mr. Justice Langton attached “very little importance” to the circumstance that the ship was in Spanish waters at the time it was requisitioned. The crucial fact was that the Spanish Government was in possession of the ship at the time of the issue of the writ. If the Spanish Government had transferred title and possession to a third person, and the owners were bringing a possessory action, the place of requisition would have been relevant, and the case would have been decided on the principles laid down in Luther v. Sagor, [1921] 3 K. B. 532, and Princess Paley Olga v. Weiss, [1929] 1 K. B. 718. This point is borne out by a comparison of The Jupiter (No. 1), [1924] P. 236, and The Jupiter (No. 2), [1925] P. 69.

24 The El Neptuno, 62 LI. L. Rep. 7, at p. 9.

25 [1938] P. 233, [1938] 3 All E. R. 333 (judgment of Mr. Justice Bucknill); [1939] P. 37, [1938] 4 All E. R. 267 (judgment of the Court of Appeal: Slesser, Finlay, Goddard, L. JJ.); [1939] A. C. 256, [1939] 1 All E. R. 719, this Journal, Vol. 33 (1939), p. 583 (judgment of the House of Lords: Lord Atkin, Lord Thankerton, Lord Russell of Killowen, Lord Macmillan and Lord Wright).

For comment, see H. Lauterpacht, “Recognition of Insurgents as a De Facto Government,” 3 Modern Law Rev. (1939), pp. 1–20; and Herbert W. Briggs, “De Facto and De Jure Recognition: The Arantzazu Mendi,” this Journal, Vol. 33 (1939), pp. 689–699.

26 The owners’ actions arose out of a dispute between two groups of directors of the company. Sota and several other directors, who sympathized with the Republican Government, had fled Bilbao upon its capture by Franco, and had formed a new English company to purchase the Arantzazu Mendi and other vessels of the company’s fleet. The action in rem was brought at London by the remaining directors, who contested the right of Sota and his group to represent the company. At the same time, they instituted proceedings in the Chancery Division which were later settled by Sota’s abandonment of his claim. Since this left the vessels in the hands of the Bilbao directors, they discontinued the action in rem. See 20 Br. Yr. Bk. Int. Law (1939), pp. 151–152.

27 [1938] P. 233, at p. 242.

28 Banco de Bilbao v. Sancha; Same v. Rey, [1938] 2 K. B. 176.

29 [1921] 3 K. B. 532.

30 [1938] P. 233, at p. 248.

31 [1939] P. 37.

32 [1939] A. C. 256.

33 Ibid., at pp. 264–265. Counsel for the plaintiff had argued that even if the Nationalist Government were to be considered as the government of a sovereign state, it was not impleaded in the present action, since the Admiralty Marshal, and not the Nationalist Government, was at all material times in possession of the res. Slesser, L. J., following Lord Wright in The Cristina, held that the Nationalist Government had “powers short of ownership, of disposition and control,” which were sufficient to found a claim to immunity. [1939] P. 37, at p. 51. Lord Atkin held that the arrest gave custody, and not possession, and that it left unimpaired all possessory rights of the Nationalist Government in the ship. [1939] A. C. 256, at p. 266.

34 Lord Atkin, ibid., at p. 264.

35 [1938] P. 237, at p. 242.

36 Italics supplied.

37 House of Commons Debates, Vol. 334, col. 5.

38 Ibid., Vol. 329, col. 834. See Lauterpacht, in 3 Modern Law Rev. (1939), p. 4; and 20 Br. Yr. Bk. Int. Law (1939), pp. 125–128.

39 Goddard, L. J., [1939] P. 37, 55.

40 In dealing with the question whether recognition validated retroactively the acts of a foreign government performed within its territory, Bankes, L. J., said: “For some purposes no doubt a distinction can be drawn between the effect of the recognition by a government of the one form of government or the other, but for the present purpose in my opinion no distinction can be drawn.” [1921] 3 K. B. 532, at p. 543. Also, Warrington, L. J., ibid., p. 551.

41 [1939] 1 Ch. 182, at p. 189.

42 [1937] 1 Ch. 513.

43 [1938] 2 K. B. 176.

44 The case which offers the closest analogy to The Arantzazu Mendi is that of The Gagara, [1919] P. 95, in which the Estonian National Council, which successfully raised the claim of immunity, had been recognized “provisionally and with all reservations as to the future . . . as a de facto independent body.” But there the analogy breaks down, for in that case there was no competing government, and the Estonian Government was in actual control of the whole of the territory which it claimed. As Mr. Justice Bucknill acknowledged, but without drawing the necessary conclusion from his admission: “In The Gagara the facts were more in favour of the recognition of the Estonian Government as a sovereign body than they are in this case [of the Arantzazu Mendi].” [1938] P. 233, at p. 244.

The situation of the Nationalist Government of Spain appears to resemble more closely that of the Provisional Government of Northern Russia following the Bolshevist Revolution. According to the letter from the Foreign Office to the court in The Annette and The Dora, this government, which was merely provisional in nature, had not been “formally recognized . . . as the Government of a sovereign, independent State.” In view of the inconclusive nature of this statement, the plea of sovereign immunity was rejected. [1919] P. 105.

45 It is believed that the decision would have been on a firm basis if the action had been dismissed on the ground that the Loyalist Government, in relying upon an extraterritorial decree of requisition, had failed to establish its right to possession of the ship. See p. 279, infra. In criticizing the doctrine of this case, the writer has been much indebted to the penetrating study of Professor Lauterpacht on “Recognition of Insurgents as a De Facto Government,” 3 Modern Law Rev. (1939), pp. 1–20.

46 Slesser, L. J., pointed out in The Arantzazu Mendi that neither the decree of the Republican Government of June 28, 1937, nor that of the Nationalist Government of March 2, 1938, provided for extinction of the property rights of the owners of the ships requisitioned. [1939] P. 37, at pp. 46–47.

47 [1938] A. C. 485, at p. 509. See also the dictum of Mr. Justice Bucknill in The Arraiz, supra, p. 270.

48 59 Ll. L. Rep. 119. Sheriff Macdonald rested his decision upon the authority of The Parlement Beige, 5 P. D. 197; and The Jupiter (No. 1), [1924] P. 236. Giving conclusive weight to the claim of the Spanish Government that it had possession of the El Condado, he said: “In my view it does not matter whether they have possession or they claim possession, and it would appear to me that if the Court were to allow these proceedings to continue they would be impleaded because they would have to appear to defend themselves. Once that fact is established then the Court has only one course open to it. . . . If by any misadventure the claim of the authorised representative of a foreign State was unfounded, then the proper remedy would be through diplomatic channels between the two Sovereigns and not by legal proceedings against an independent Sovereign or its property. . . .” 59 LI. L. Rep. 119, at pp. 120–121. One may question whether the sheriff would have been so positive in his statement concerning the conclusiveness of a foreign sovereign’s claim if the present case had arisen after the decision of the House of Lords in The Cristina. See p. 267, supra.

49 On July 24, 1937, the sheriff had ordered the owners to find caution to the extent of £1000 for any damage the defenders might suffer from the interim interdict if the owners were ultimately found to have wrongfully interfered with the use and possession of the El Condado by the Spanish Government. The bond of caution was lodged in the process by the National Bank of Scotland, Ltd., the defenders in the present action.

50 63 LI. L. Rep. 83.

51 Ibid., p. 330 (Lord Aitchison, Lord Mackay, Lord Pitman and Lord Wark), decided Feb. 24, 1939.

52 63 LI. L. Rep. 330, at p. 333. Also, Lord Jamieson, ibid., p. 83, at p. 87; Lord Mackay, ibid., p. 330, at p. 336; Lord Pitman, ibid., p. 339; and Lord Wark, ibid., p. 340.

In describing the nature of the “possession” which was considered sufficient to found the claim of immunity in The Cristina and in the interim interdict proceedings in The El Condado, Lord Mackay said: “ . . . The possession which is spoken of is not ascertained legal (Judge-sanctioned) possession. It is merely de facto possession, and at one ascertained point of time. It may be of any origin, and may, indeed, in my opinion, be itself in truth wrongous. Possession attained vi, clam, or precario, will do as well as any other. Hence the notion that some sort of declaration of actual ‘right’ to ride off with vessels from a British harbour was set up, a right of which any attempted legal deprivation or restriction would be a ‘wrong,’ is a misconstruction of the whole public international law doctrine.” Ibid., p. 338. Cf. p. 268, supra.

53 Ibid., p. 87, citing Russian Commercial and Industrial Bank v. Comptoir D’Escompte de Mulhouse and Others, [1925] A. C. 112.

Lord Jamieson (ibid., p. 87) and Lord Aitchison (ibid., p. 333) also stated that if the requisition decree were to be regarded as a penal statute, it would have no validity outside Spanish territory, and the British courts would not grant their aid to its execution. They did not, however, base their decisions on this point.

54 See pp. 276–277, supra.

55 63 Ll. L. Rep. 83, at p. 87. In Chung Chi Cheung v. The King, Lord Atkin said: “However the doctrine of exterritoriality is expressed, it is a fiction, and legal fictions have a tendency to pass beyond their appointed bounds and to harden into dangerous facts.” [1939] A. C. 160, at p. 174; this Journal, Vol. 33 (1939), p. 376, at p. 382.

56 [1927] P. 122, at p. 144; quoted by Lord Jamieson in The El Condado, 63 Ll. L. Rep. 83, at p. 87.

57 Lord Mackay, 63 LI. L. Rep. 330, at p. 339. Lord Wark considered that there was no need to examine this point, since the decree could be denied validity on the ground that it purported to affect property outside of Spain. If it had been necessary, he said, he would have held also that the decree had no validity as to the El Condado on the ground that at the date it was issued Bilbao was no longer in the possession of the Spanish Government, but was held by the Nationalist Government which had been recognized by the British Government as the de facto government of that part of Spain including Bilbao. Ibid., p. 341.

58 Ibid., p. 334. Cf. The Abodi Mendi, [1939] P. 178, footnote 19, supra.

Another hypothetical question may be raised: Supposing that the Spanish Government had transferred the El Condado to a private person and the original owners had sued for delivery of the ship? Judgment would undoubtedly have been given for the plaintiffs on the authority of The Jupiter (No. 3), [1927] P. 122; affirmed by Court of Appeal, ibid., p. 250.