1 26 Dept. of State Bulletin 984 (1952), Letter of Jack B. Tate, Acting Legal Adviser, to the Acting Attorney General, Philip B. Perlman, May 18, 1952.

2 192 N. Y. Supp. (2d) 469, Supreme Court, Westchester County, Spec. Term, Oct. -1, 1959, Samuel W. Eager, J. The writer was associated with Louis C. Bial, Esq., and Arthur F. Gaynor, Esq., members of the New York Bar, in the preparation of the case, and wishes to thank them for the use of briefs and documents referred to in this discussion. Delson, Levin & Gordon, and Close, Griffiths, McCarthy & Gaynor, New York City, represented the plaintiff. Milbank, Tweed, Hope & Hadley, New York City (Samuel Boss Ballin, Esq., and Alan C. Swan, Esq. of counsel), represented the Chase Manhattan Bank. No appeal was taken from the decision of Judge Eager.

3 192 N.Y. Supp. (2d) 469. Sec. 943, N.Y. Civil Practice Act, “Actions and Special Proceedings by Plaintiff and Sheriff Jointly” (in aid of a warrant of attachment).

4 Kawasaki Kisen Kaisha of Kobe v. Bantham Shipping Co. Ltd. [1939] 2 K.B. 544, at p. 552.

5 Michael Zander, “The Act of State Doctrine,” 53 A.J.I.L. 826, 852 (1959). -“

6 Note 1 above.

7 The Tate Letter is an excellent summary review of the current (1952) status of the newer “ restrictive “ (compared to the classical or absolute) theory of sovereign immunity that such immunity is recognized with regard to public acts (jure imperii) of a state, but not with regard to private acts (jure gestionis). When issued, the Tate Letter was hailed as a major policy step of the United States in joining the worldwide trend towards adoption of the restrictive theory. The Supreme Court in National City Bank v. Republic of China, 348 U.S. 356 (1955), commented with evident approval, p. 361, that “Recently the State Department has pronounced broadly against recognizing sovereign immunity for the commercial operations of a foreign government … “ For discussions of the Tate Letter, see: Bishop, , “New United States Policy Limiting Sovereign Immunity,” 47 A.J.I.L. 93 (1953)Google Scholar; Re, “Nationalization and the Investment of Capital Abroad,” 42 Georgetown Law J. 44, 62 (1953); Comment, “The Jurisdictional Immunity of Foreign Sovereigns,” 63 Tale Law J. 1148, 1160 (1954); Cardozo, “Sovereign Immunity: The Plaintiff Deserves a Day in Court,” 67 Harvard Law Rev. 608 (1954); W. H. Reeves, “Leviathan Bound—Sovereign Immunity in a Modern World,” University of Virginia Law Review (May, 1957), and “Good Fences and Good Neighbors: Restraints on Immunity of Sovereigns,” 44 ABA Journal 521 (June, 1958); V. G. Setser, “ The Immunities of State and Government Economic Activities,” 24 Law & Contemporary Problems 291 (Spring, 1959). For earlier criticism of the tendency of the executive to assume judicial functions where issues of foreign sovereigns’ activities are involved, see Jessup, , “ Has the Su preme Court Abdicated One of Its Functions”, 40 A.J.I.L. 168 (1946)Google Scholar; Note, “Judicial Deference to the State Department on International Legal Issues,” 97 IT. Pa. Law Rev. 79 (1948).

8 Weilamann, cited note 2 above, pp. 472, 473.

9 The preliminary question as to whether the moneys in the bank accounts in the names of the two Soviet banks were the property of the TT.S.S.R. itself (involving the issue of the identity of these two banks as mere Soviet agencies of the Soviet state), was resolved in favor of plaintiff. Ibid. 471.

10 Ibid. .

11 Ibid. 472.

12 Ibid. 471.

13 Ibid.

14 See. 943, C.P. Act, note 3 above; Sec. 922 (3), “Actions and Special Proceedings by Sheriff” (action by sheriff in aid of attachment issued against non-resident defaulting defendant).

15 In his letter to the Attorney General dated March 9, 1959, the Legal Adviser of the State Department, Mr. Loftus E. Becker, relied on Dexter and Carpenter Inc. v. Kunglig Jarnvagsstyrelsen, 43 F. 2d 705 (2 C.A., 1930), and Bradford v. Chase National Bank, 24 F. Supp. 38 (S.D.N.Y., 1938), as authority for the rule that execution of a judgment not be permitted against a foreign sovereign consenting to suit, adding that “where the foreign sovereign has not submitted to the jurisdiction of the Court it would be an a fortiori case.” If the Tate policy were to be affirmatively adhered to by specific instructions from the State Department to courts where the basic question of jure gestionis v. jure imperii arises, and the Department were to decide, in a given state of facts that jure gestionis is shown, it would necessarily follow that the objection to execution or attachment against a foreign sovereign's property would no longer exist. It could hardly be argued with any show of logic that the Tate principle, which subjects a foreign sovereign to jurisdiction (presumably for all purposes, from service of process to collection of judgment), stops, or should stop, at the point of execution or attachment upon the foreign sovereign's property. Such a position, would, it is suggested, make a mockery of the Department's announcement of May, 1952. It is high time that sanctity or “partial” sanctity of a foreign sovereign's property (i.e., after judgment) be put aside. If a foreign sovereign, under the Tate doctrine, may be subjected to jurisdiction in a case of jure gestionis, it should be subject, as all other defendants, for all jurisdictional as well as procedural purposes. In other countries, this aspect of the absolute immunity doctrine is beginning to weaken (Setser, loc. cit. note 7 above, and authorities cited at p. 308), and in a number of cases in countries adhering to the restrictive theory the courts have shown a disposition to order execution upon state property. Setser, ibid, at p. 312, lists 14 U.S. commercial treaties which contain an immunity waiver as to suit, and also to immunity from execution of judgment, relating not only to private but publicly-owned enterprises.

16 Marshall v. Friedman, 176 Misc. 32, 26 N.Y.S. (2d) 756; Brown, et al. v. J. P. Morgan and Co. Inc., 177 Misc. 626, 31 N.Y.S. (2d) 323.

17 192 N.Y.S. (2d) 469.

18 The correspondence between counsel for Mrs. “Weilamann and the State Department, and the letters of the Legal Adviser to the Attorney General dated March 9 and April 1, 1959, are found in an Appendix to Plaintiff's Supplemental Memorandum submitted in support of jurisdiction.

19 For comment on the degree to which European courts permit execution upon judgments or attachments against foreign sovereigns, see 1958 Proceedings, American Society of International Law 81 et seq., Panel II : “Foreign Public Entities as Litigants in U.S. Courts“; “The Tate Letter and the National City Bank Case: Implications.” For a discussion of the problems confronting creditors in suits against a foreign government, in the light of varying characterizations of the act of borrowing either as jure gestionis or imperii, see Delaume, “Jurisdiction of Courts and International Loans,” 6 A. J. Comp. Law 189 at 201-203 (1957).CrossRefGoogle Scholar

20 132 F. Supp. 684 at 684.

21 Ibid. 685, 686.

22 Ibid. 687. In a perceptive comment in the margin (footnote 7), Judge Weinfeld (answering the argument that the restrictive theory is illusory since jurisdiction in many instances can only be acquired by attachment, and that there is a manifest contradiction in the Department's position that Korea's funds are immune from attachment though not from suit), observed that even where there is non-attachment jurisdiction, “there is no assurance of collection of any judgment that may be obtained against the foreign state. “ Dexter v. Kunglig, etc., note 15 above. Further, Judge Weinfeld held it unnecessary “ at this time “ to decide whether, in the light of the relaxation of the absolute theory, a distinction should now be made between seizure of property necessary to vest jurisdiction and seizure of property under execution to enforce collection of a judgment where jurisdiction had been previously acquired without attachment or seizure. Finally, that “ a distinction might be urged on the ground that in the instance where attachment is necessary to vest jurisdiction, the basic issues are still unresolved, whereas in the instance of jurisdiction already acquired, the Court had passed on all issues, including whether or not the claim rests upon acts of a private rather than a public character.” (Emphasis added.)

23 In Loomis v. Rogers, 254 F. 2d 941 (C.A.D.C., June 16, 1958, cert, den., 359 V. S. 928), involving an attachment by plaintiff, asserting a claim for legal services, of funds of the Italian Government in the hands of the Attorney General as successor to the Alien Property Custodian, there was no official suggestion of immunity by the Italian Government. The court held (p. 944) that the requirement that there be a formal suggestion of immunity applies only in those cases where there is a question of fact as to whether the property proceeded against is the public property of the sovereign. Since there was no question that the property in question belonged to the Italian Government, the court directed dismissal of the attachment proceedings for want of jurisdiction.

24 167 N.Y.S. (2d) 285 at 287.

25 Weilamann, 192 N.Y.S. (2d) 469, seems to be the “really significant case” which Setser anticipated when (note 7 above) writing, in the Spring of 1959, he stated: “ … Since its issuance no really significant case has arisen to test the determination of the government to be guided by the principles set forth (in the Tate letter) to indicate the criteria by which a determination is to be made as to what classes of acts are entitled to immunity, and to establish the firm precedents needed to fix the lines of a permanent policy. … “ (Emphasis added.)

26 See the position of the Justice Department as stated by G. S. Leonard, Civil Division, in “ The U.S. as Litigant in Foreign Courts,” 1958 Proceedings, American Society of International Law 95, which in substance is to the effect that in defending the United States abroad, it is preferable and less expensive to meet nearly every foreign proceeding with the plea that it is an uncontested suit against a sovereign. It is interesting that at the Cologne (1958) Conference of the International Bar Association, a resolution on sovereign immunity, which was ready for adoption, was deferred for further study by reason of the. intervention of several high-ranking officials who opposed the resolution on the ground that it would make it more difficult for the U.S. to maintain its immunity from suit in foreign courts. See Anderson, “The International Bar Conference at Cologne, Germany,” 5 Federal Bar News 312 (1958). It has been suggested (Setser, note 7 above, p. 314) that treaty arrangements be entered into to allow, on a reciprocal basis, the liabilities that each nation has assumed under its own law to be enforceable against it by foreign courts, which would apply the other countries’ applicable laws. The obvious criticisms of this proposal are that extraterritorial extension of national laws would take place, and complicated procedural problems as well as insoluble problems of interpretation and enforcement of foreign laws would arise.

27 Mr. Louis C. Bial, co-counsel for Mrs. Weilamann, has trenchantly stated: “Whether attachment will be permitted under the Tate Letter is the crucial issue of the whole matter. It is impossible to get jurisdiction over any foreign government or country without first bringing attachment. If the Tate Letter were supposed to do anything except make its author famous, attachment at least for the purpose of obtaining jurisdiction should be permissible” (Panel II discussion, cited note 19 above, p. 110). Cohn, note 28 below, at p. 273, refers to a decision of the Court of Appeals of Paris ( I Chambre, 29 Jan. 1957, 84 Journal du Droit International 393 et seq. (1957)) that those foreign loans constitute acta imperii whose proceeds are intended for the use of the public services of the foreign state. This might be a useful criterion for nations of the free world where there is still some fairly recognizable distinction between the public and private sectors of the economy, but hardly for the Soviet Union where obviously the proceeds of all state loans are devoted to “public services.” The emphasis, however, for which this writer contends is that the State Department itself, if the Tate principle is to be given any practical and meaningful content, should undertake the responsiblity of characterizing any foreign state loan as either actum gestionis, and thus not entitled to immunity, or actum imperii, and immune, for the purpose, at the very least, of guidance to the courts in the matter of subjecting the sovereign to suit, if not to execution of a judgment or attachment of its property within the forum.

28 E. J. Cohn, “Waiver of Immunity,” 35 Brit. Yr. Bk. of Int. Law 260 (1958). Dr. Cohn goes on to comment: “ … The rule of absolute immunity which the English courts have adopted is nearly everywhere else being replaced by that of relative immunity. In most of the leading countries immunity of sovereign states no longer covers acta gestionis. Even in the fields in which it is allowed to persist the operation 800 of immunity is limited by the readiness of the courts to presume that contracts concluded by a foreign state contain an implied submission to jurisdiction. The position now is that the English courts accord to foreign states immunity to an extent to which no other state would accord immunity either to this country or to any other state.” Further (at p. 261), that when the trading state appeared, the courts on the continent imputed to them a presumed intention to submit to the jurisdiction, and that all that had to be done was to establish types of cases in which the intention to submit to jurisdiction was to be implied. The main point of this paper is that the State Department, instead of waiting for the embarrassment of granting requests for immunity ad hoc, set forth in an addendum to the Tate Letter that, as above noted, in certain specific factual contexts or categories, immunity will not be granted. For an exhaustive study of sovereign immunity see Gmtir, Gerichtsbarkeit fiber Fremde Staaten (Zurich, 1948).

29 At the general meeting of the International Bar Association at Salzburg, Austria, July 4-8, 1960, the Committee on Sovereign Immunity submitted a Report on the Immunity of Sovereigns engaged in Commercial Activity. Strong recommendations were made, in a majority report, for the extension of the restrictive theory of sovereign immunity to the liabilities of governments when engaged in commercial activities outside of their own sovereign domain and with the nationals of other countries. These 1960 recommendations were elaborations of the Oslo Resolution passed at the 1956 meeting of the Association, which grew out of the symposium at Oslo on the subject “Suggestions for alleviating hardships from sovereign immunity in tort and contract.” The Salzburg Report was signed by Sven Arntzen (Norway), W. O. Carter (England), Cure (France), Roberto Eeyes Morales (Spain), Wm. Harvey Beeves (U.S.A.), Chairman, Otfried Sander (Germany), Mehmet Taplamaei (Turkey), and B. O. Wilberforce (England). Robert N. Anderson (U.S.A.) filed a sole dissent to the majority report.