1 N. Y. Civ. Prac. Act. §977-b provides in pertinent part:

§977-b. Receivers to liquidate local assets of foreign corporations. 1. An action may be instituted in the supreme court for the appointment of a receiver of the assets in this state of a foreign corporation, whenever such foreign corporation has assets or property of any kind whatsoever, tangible or intangible, within the state of New York, and (a) it has heretofore been or is hereafter dissolved, liquidated or nationalized * * *

2 It is not clear whether Societe Generale on August 26 presented documents to Farr, Whitlock before or after C. A. V.’s warning to Farr, Whitlock on that day.

3 This motion was subsequently denied by the New York court. See Schwartz v. Compania Azucarera Vertientes-Camaguey de Cuba, 12 A. D. 2d 506, 207 N. Y. S. 2d 288 (1960).

4 Since Farr, Whitlock has an indemnification agreement with C. A. V., it is unlikely that Parr, Whitlock will suffer a double liability.

5 We assume that the district court below was correct in concluding that C. A. V. had an interest in the sugar on the date of the expropriation decree and that the sugar was in Cuban territorial waters on that date.

6 The act of state doctrine appears to be well established among British courts. See Blad v. Bamfield, 3 Swans. 604, 36 Eng. Rep. 992 (Ch. l6747); A. M. Luther v. James Sagor & Co., [1921] 3 K.B. 532 (C.A.); Princess Paley Qlga v. Weisz, [1929] 1 K.B. 718 (C.A.); Re, Foreign Confiscations in Anglo-American Law 128–40 (1951).*

Elsewhere, however, courts have been more willing to inquire into the legality of steps taken by foreign sovereigns. Anglo-Iranian Oil Co. v. S. U. P. O. R. Co., Civil Court of Rome, Sept. 13, 1954, [1955] Foro Italiano I. 256, [1955] Int’l L. Rep. 23, 49 Am. J. Int’l L. 259 (1955). Compare Societe Potasas Ibericas v. Black, Supreme Court (France), March 14, 1939, [1939] Dalloz I. 257, [1938–1940] Ann. Dig. 152 (No. 54); Union des Republiques Sociallstes Sovietiques v. Intendant General Bourgeois Es-Qualite et Societe La Ropit, Supreme Court (France), March 5, 1928, Sirey I. 217, [1927- 1928] Ann. Dig. 67 (No. 43); and Volatron v. Moulin, Court of Appeal of Aix, March 25, 1939, [1939] Dalloz I. 329, [1938–1940] Ann. Dig. 24 (No. 10), with Societe Hardmuth, Court of Appeal of Paris, Dec. 2, 1950, 44 Rev. Cr. Dr. Int. Priv. 501 (1955); De Keller v. Maison de la Pensee Francaise, Tribunal of La Seine, July 12, 1954, 44 Rev. Cr. Dr. Int. Priv. 503 (1955), [1954] Int’l L. Rep. 21, 49 Am. J. Int’l L. 585 (1955); Martin v. Banque d’Espagne, Supreme Court (France), Nov. 3, 1952, 42 Rev. Cr. Dr. Int. Priv. 425 (1953), [1952] Int’l L. Rep. 202 (No. 42); Larrasquitu et l’Etat Espagnol v. Societe Cementos Rezola, Court of Appeal of Poitiers, Dec. 20, 1937, [1938] Sirey III. 68, [1935–1937] Ann. Dig. 196 (No. 70). Compare Prince Dabischa-Kotromaniez v. Societe Lepke, Tribunal of Berlin, Nov. 1, 1928, 56 Clunet 184 (1929), with Domke, Indonesian Nationalization Measures Before Foreign Courts, 54 Am. J. Int’l L. 305, 318–19 (1960). Compare Senembah Mattschappij N.V. v. Republiek Indonesie Bank Indonesia and De Twentsche Bank N.V., District Court of Appeals of Amsterdam, reported in Domke, supra at 307–08, with United States of Mexico v. Batafsche Petroleum Naatschappij, District Court of Middleburg, Aug. 2, 1938, [1938] W. & N. J. No. 790, [1919–1942] Ann. Dig. 16 (No. 7); Petroservice & Credit Minier Franco-Roumain v. El Aguila, Court of Appeals of The Hague, Dec. 4, 1939, [1939] W. & N. J. No. 115, aff’d on other grounds, Feb. 7, 1941, [1941] W. & N. J. [1919–1942] Ann. Dig. 17; and Dairs et Cy. v. El Aguila, District Court of Rotterdam, July 31, 1939, [1939] W. & N. J. No. 747, [1919–1942] Ann. Dig. 19. But see Propetrol, Petroservice, et Petrolet v. Compania Mexicano de Petroleo, Civil Tribunal of Antwerp, Feb. 21, 1939, [1939] Belgique Judicaire II. 12, [1938–1940] Ann. Dig. 25 (No. 11); Davis et Cie v. Compania de Petroleo, Court of Appeal of Rotterdam, 41 Bull. Inst. Jur. Int. 256 (1939), [1938–1940] Ann. Dig. 25 (No. 12); Hungarian Soviet Government, Supreme Court of Austria, Oct. 31, 1922 (Ob. I. 1055/22), [1922] 4. E.O.G.Z. 274 (No. 10), [1919–1922] Ann. Dig. 56 (No. 31).

* But see Anglo-Iranian Oil Co. v. Joffrate, [1953] Int’l L. Rep. 316, 47 Am. J. Int’l L. 325 (Supreme Court of Aden); Fawcett, supra, note 7; at 375.

7 The Justice stated:

[I]t is a contradiction in terms to say that within its jurisdiction it is unlawful to persuade a sovereign power to bring about a result that it declares by its conduct to be desirable and proper. It does not, and foreign courts cannot, admit that the influences were improper or the results bad. It makes the persuasion lawful by its own act. The very meaning of sovereignty is that the decree of the sovereign makes law (213 U.S. at 358).

8 Another Supreme Court decision should be mentioned in this respect, Shapleigh v. Mier, 299 U. S. 468 (1937). That case involved a dispute over title to a tract of land which had formerly been part of Mexico but which had become part of the United States as a result of a change in the course of the Rio Grande River. While under its sovereignty the Mexican state of Chihuahua had expropriated the land in question. At the outset of its opinion in Shapleigh the Supreme Court stated:

The question is not here whether the proceeding was so conducted as to be a wrong to our nationals under the doctrines of international law, though valid under the law of the situs of the land. For wrongs of that order the remedy to be followed is along the channels of diplomacy (299 U. S. at 471).

The Court found it unnecessary to decide whether it could examine the validity of the expropriation under Mexican law because the plaintiff had failed to establish what that law was on the point at issue.

9 If there had been adequate compensation for the seizure, regardless of the other circumstances surrounding the expropriations, it would be very difficult to find any violation of international law.

10 E.g., Note of August 22, 1938, to Mexico in 3 Hackworth Int’l Law 658–59 (1942); Note of July 21, 1938, to Mexico in 3 Hackworth, op. cit. supra at 656; Note of April 3, 1940, to Mexico in 3 Hackworth, op. cit. supra at 662; Note of August 28, 1953, to Guatemala in 29 Dep’t State Bull. 357 at 359 (1953).

11 E.g., Chorzow Factory Case (Indemnity), P.C.I.J. Judgment No. 13, September 13, 1928, ser. A. No. 17, 1 Hudson, World Court Reports 646, 677; German Interest in Polish Upper Silesia (Merits), P.C.I.J. Judgment No. 7, May 25, 1926, ser. A., No. 7 , 1 Hudson, World Court Reports 510, 523–24; Norwegian Shipowners’ Claims (Norway/United States), 1 U.N. Rep. Int’l Arb. Awards, 307, 334 (Perm. Ct. Arb. 1921); Arabian-American Oil Company v. Saudi Arabia, Award of Arbitral Tribunal, Geneva, 1956, at 61, 101–02, 109, 127, portions of award quoted in 6 Netherlands Int’l L. Rev. 233–34 (1959); Marguerite de Joly de Sabla (United States/Panama), 6 U.N. Rep. Int’l Arb. Awards 350, 366 (1933); Arbitral Award Between Portugal and Germany, June 30, 1930, 2 U.N. Rep. Int’l Arb. Awards 1035, 1039 (1930); Shufeldt Claim (United States/Guatemala), 2 U.N. Rep. Int’l Arb. Awards 1079, 1095 (1930); Affaire Goldenberg (Germany/Rumania), 2 U.N. Rep. Int’l Arb. Awards 901, 909 (1928); Spanish Zone of Morocco Case (Great Britain/Spain), 2 U.N. Rep. Int’l Art. Awards 515, 647 (1925); Landreau Claim (United States/Peru), 1 U.N. Rep. Int’l Arb. Awards 347, 365 (1921); Selwyn’s Case (United States/Venezuela), Ralston, Venezuelan Arbitrations of 1903, at 322 (1904).

12 see Restatement, Foreign Relations Law of the United States, §190, comment a (Proposed Official Draft, 1962); Anderson, Title to Confiscated Foreign Property, 20 Am. J. Int’l L. 528–29 (1926); -- Basis of the Law Against Confiscating Foreign-Owned Property, 21 Am. J. Int’l L. 525 (1927); Baxter & Sohn, Convention on State Responsibility, art. 10 (Draft No. 12, 1961); Bindschedler, Verstaatlichungmassnahmen und Entschadigungspflicht nach Volkerrecht 111 (1950); Doman, Postwar Nationalization of Foreign Property in Europe, 48 Colum. L. Rev. 1125, 1130–31 (1948); -- Compensation for Nationalized Property in Post-War Europe, 3 Int’l L. Q. 323 (1950); Domke, Indonesian Nationalization Measures Before Foreign Courts, 54 Am. J. Int’l L. 305 (1960); Fachiri, Expropriation and International Law, 6 Brit. Yb. Int’l L. 159 (1925); -- International Law and the Property of Aliens, 10 Erit. Yb. Int’l L. 32 (1929); Fauchille & Sibert, 32 Revue Generale de Droit Int’l Public 5, 22 (1925); LaLai Agraire Lithuanienne; Fawcett, Some Foreign Effects of Nationalization of Property, 27 Brit. Yb. Int’l L. 355 (1950); Friedmann, Some Impacts of Social Organization on International Law, 50 Am. J. Int’l L. 475, 505 (1956); 1 Hyde, International Law Chiefly as Interpreted and Applied by the United States 710–25 (2d rev. ed. 1947); Kaufman, Regles Generales du Droit de la Paix, 54 Hague Recueil 313, 429 (1935); Kunz, The Mexican Expropriations, 17 N.Y.U. L. Rev. 327, 344 (1940); Peselj, International Aspects of the Recent Yugoslav Nationalization Law, 53 Am. J. Int’l L. 428 (1959); Rado, Czechoslovak Nationalization Decrees; Some International Aspects, 41 Am. J. Int’l L. 795 (1947); Re, The Nationalization of Foreign-Owned Property, 36 Minn. L. Rev. 323, 328 (1952); Scelle, 2 Precis de droit des gens 113 (1934); Scheuner in Report of 48^th Conference of the Int’l Law Association, 164 (1958); Schindler, Besitzen konfiskatorische Gesetze ausserterritoriale Wirkung?, 3 Schweizerisches Jahrbuch fur Internationales Recht 65, 94 (1946); 1 Schwarzenberger, International Law 205 (3d ed. 1957); Schwebel in Report of 48^th Conference of the Int’l Law Association 150 (1958); Verdross, Die Nationalisierung Niederlandischer Unternehmungen in Indonesian im Lichte des Volkerrects, 6 Netherlands Int’l L. Rev. 278 (1959); Weiss-Tessbach in Report of 48th Conference of the Int’l Law Association 179–80 (1958); 2 Whiteman, Damages in International Law 1386 (1937); Wortley, Observations on the Public and Private International Law Relating to Expropriation, 5 Am. J. Comp. L. 577, 591 (1956). See generally Wortley, Expropriation in Public International Law 33–36 (1959).

13 Position of Latin American states. The rule stated in this Section is questioned by some states, especially in Latin America. Not only do they maintain the general position, explained in Comment a. to §169, that aliens are entitled to no better treatment than nationals, but they have insisted specifically that international law imposes no duty to pay compensation when property is taken pursuant to a general program of social or economic reform. See, e.g., Mexican Minister of Foreign Affairs to Secretary of State of the United States, August 3, 1938, 3 Hackworth, Digest of International Law, 657 (1942).

§190 Reporters Notes.

See also U.N. Gen. Ass. Off. Rec. 7th Sess., 2d Comm. 286 (1952) (remarks of representative of Iran); id. at 287 (remarks of representative of Mexico); see generally Brandon, Nationalization Before the United Nations, Fifth International Conference of the Legal Profession 38 (1954).

14 The first paragraph of the preamble to Law No. 851 states as follows:

WHEREAS, the attitude assumed by the government and the Legislative Power of the United States of North America, which constitutes an aggression, for political purposes, against the basic interests of the Cuban economy, as recently evidenced by the Amendment to the Sugar Act just enacted by the United States Congress at the request of the Chief Executive of that country, whereby exceptional powers are conferred upon the President of the United States to reduce the participation of Cuban sugars in the American sugar market as a threat of political action against Cuba, forces the Revolutionary Government to adopt, without hesitation, all and whatever measures it may deem appropriate or desirable for the due defense of the national sovereignty and protection of our economic development process.

15 This court does not hope to resolve this legalistic analogue to the dispute over whether the chicken or the egg came first. If one believes legal rights exist separate from and prior to the existence of legal remedies, he may interpret our holding to mean that we have recognized an international wrong and have then fashioned an appropriate remedy. If, on the other hand, the reader believes legal rights cannot exist in the absence of legal remedies, he is free to interpret our words as meaning that since municipal courts can grant a remedy which divests an international title, the appellant’s title is invalid.

16 We mention one further problem related to this case which we find unnecessary to settle but which may arise to torment some future court with a case similar to the present one. That problem is whether the law governing this case involves elements of federal law or whether the case is governed solely by New York law. Cf. Bergman v. De Sieyes, 170 P.2d 360 (2 Cir. 1948). It has been said that the act of state doctrine is part of the law of conflict of laws. If that is so, it would seem that under the rule in Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U. S. 487 (1941), it is New York law which we are applying. On the other hand, certain cases have indicated that international law is part of the body of federal law. See, e.g., The Lusitania, 251 Fed. 715, 732 (S. D. N. Y. 1918). Perhaps Erie R.R. v. Tompkins has changed the rule in these latterly mentioned cases. But see.1 Oppenheim, International Law 41 n. 4 (8th ed. 1955). For our purposes here we do not have to resolve these questions because it appears to us that a New York court would reach the same result we reach. Cf. Frenkel & Co. v. L’Urbaine Fire Ins. Co., 251 N. Y. 243, 157 N. E. 430 (1929) (alternative holding); Fred S. James & Co. v. Second Russian Ins. Co., 239 N. Y. 248, 146 N. E. 369 (1925); Sulyok v. Penzintezeti Kozpont Budapest, 279 App. Div. 528, 111 N. Y. S. 2d 75, modified on other grounds, 304 N. Y. 704, 107 N. E. 2d 604 (1952) (percuriam); Schwartz v. Compania Azucarera Vertientes-Camaguey De Cuba, 208 N. Y. S. 2d 833 (Sup. Ct. 1960). See also Falk, supra at 11.