1 This statute is designed to use surplus agricultural commodities to expand international trade and to further the foreign policy of the United States. It provides a means for the sale of such commodities through private trade channels to governments of friendly nations for foreign currencies. In negotiating agreements for the sale of surplus agricultural commodities to foreign countries the President is directed by §1701 (b) to “take appropriate steps to assure that private trade channels are used to the maximum extent practicable. …” On May 22, 1961, Spain and the United States entered into an Agricultural Commodities Agreement which permitted purchasers authorized by the Government of Spain to buy various amounts of surplus commodities, including $14.4 million worth of wheat, by depositing pesetas to the account of the United States.

2 “Should any dispute arise between Owners and the Charterers, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The Arbitrators shall be commercial men.”

3 9 U. S. C. §4.

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any court of the United States which, save for such agreement, would have jurisdiction under the judicial code at law, in equity, or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. Five days’ notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by law for the service of summons in the jurisdiction in which the proceeding is brought. The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or issues to a jury in the manner provided by law for referring to a jury issues in an equity action, or may specially call a jury for that purpose. If the jury find that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury find that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

4 To make doubly sure that the appellant had been properly served, the appellee, on October 22, 1963, sought to take advantage of the recent amendment to Rule 4(i) of the Fed. Rules of Civil Procedure by reserving the appellant by registered mail without a court order. Since we deem the initial service valid, we need not pass on the validity of the second service.

5 International Convention for the Unification of Certain Eules Concerning the Immunities of State Ships. The French text of the Convention is set out in Harvard Research in International Law, 426-429 (1931). An English translation prepared by the Department of Sfate may be found in Allen, The Position of Foreign States Before National Courts, 303-308 (1933).

Article I of the Convention provided:

Seagoing vessels owned or operated by States, cargoes owned by them, and cargoes and passengers carried on Government vessels, and the States owning or operating such vessels, or owning such cargoes, are subject in respect of claims relating to the operation of such vessels or the carriage of such cargoes, to the same rules of liability and to the same obligations as those applicable to private vessels, cargoes, and equipments.

Article II provided that these liabilities and obligations may be enforced by the same rules and procedure applied to private ships and cargoes, while Article III excepted from the application of the first articles “ships of war, Government yachts, patrol vessels, hospital ships, auxiliary vessels, supply ships, and other craft owned or operated by a State and used at the time a cause of action arises exclusively on Governmental and noncommercial service …” However, Article III did provide for certain remedies before the courts of the sovereign owning or operating a vessel as a public activity.

6 See Comment, supra, 63 YALE L. J. at 1157-1159.

7 The plea of sovereign immunity for the Comisaria General in the district court was supported only by a conclusionary affidavit of the Spanish Consul in New York. A consul is supposedly clothed with authority to act for his government only in commercial matters. Since nothing in the record indicates that the Spanish Consul was specially authorized to interpose a claim of sovereign immunity, the affidavit was plainly insufficient. The Sao Vicente, 260 U. S. 151 (1922) ; The Anne, 16 U. S. 435, 3 Wheat. 435 (1818); The Secundus, 13 F. 2d 469 (E. D. N. Y. 1926); Harris & Co. Adv. Inc. v. Sep. of Cuba, 127 So. 2d 687 (D. C. App. Fla. 1961).

On appeal the Spanish Ambassador to the United States has written a letter directly to this court claiming immunity for the Comisaría General and has moved for permission to appear specially in the proceeding. We find it unnecessary to decide whether this procedure is sufficient to raise the claim of sovereign immunity or whether the defense has been waived through a failure to present it properly. Under the view we take of sovereign immunity, permitting the Spanish Ambassador to intervene at this stage in the proceedings will not materially prejudice the appellee, who does not dispute appellant’s sovereign status. We therefore grant the motion of the Spanish Ambassador and treat the claim of sovereign immunity as properly presented to the court.

8 Weiss, Competence ou l’incompetence des tribunaux à l’égard des États étrangers, Recueil Des Cours, 525 (Hague Academy of Int’l L. 1923); De Paepe, De la compétence civile a l’égard des États étrangers et de lews agents politiques, diplomatiques ou consulaires, 22 Journal du droit international 31, 33 (Cluaet 1895); Draft Convention on the Competence of Courts in Regard to Foreign States, Harvard Law School Research in International Law, 386-391 (1931).

9 Lauterpacht, supra, 28 Brit. Y. B. Int’l L. at 225; Lalive, L’immunité de jurisdiction des États et des Organisations Internationales, 3 Recueil Des Cours 205, 259-260 (Hague Academy of Int’l Law 1953). For example, any individual may be able to purchase a boat, but only a sovereign may be able to purchase a battleship. Should the purchase of a yacht be equated with the purchase of a battleship¶

10 See Fensterwald, Sovereign Immunity and Soviet State Trading, 63 Harv. L. R. 614, 621 (1950); Sucharitkul, supra, at 168-169.

11 E.g., Lauterpacht, supra, 28 Brit. Y. B. Int’l L. at 225-226; Fitzmaurice, State Immunity from Proceedings in Foreign Courts, 14 Bbit. Y. B. Int’l L. 101, 123-124 (1933); Comment, supra, 63 Yale L. J. at 1161-1162.

12 National Sank v. Republic of China, supra, 348 U. S. at 360; Compania Espanola v. Navemar, 303 U. S. 68, 75 (1938).

13 In New York and Cuba M. S.S. Co. v. Kep. of Korea, 132 F. Supp. 684, 685 (S. D. N. Y. 1955), the State Department declined to suggest immunity because the act in question was not “purely governmental in character.”

14 Lalive, supra, 3 Recubil Des Coues at 285-286.

15 A typical provision is contained in Article XVIII (Par. 3) of the FCN Treaty with Israel, signed August 23, 1951:

“No enterprise of either Party, including corporations, associations, and government agencies and instrumentalities, which is publicly owned or controlled shall, if it engages in commercial, manufacturing, processing, shipping or other business activities within the territories of the other Party, claim or enjoy, either for itself or for its property, immunity therein from taxation, suit, execution of judgment or other liability to which privately owned and controlled enterprises are subject therein.” Quoted in Setser, 1961 Proceedings of Am. Soc. Int’l L. at 90.

16 See fn. 5, supra.

17 Egyptian Delta Bice Mills Co. v. Comisaria General de Madrid, 55 Bulletin de législation et le jurisprudence egyptiénnes, 114 (1942-3), quoted in Lauterpacht, supra, 28 Brit. Y. B. Int’l L. at 255.

18 Takhowsky v. Gouvernement federal Suisse et Begnier, 48 Journal du droit international 179 (Clunet) (Court of Appeal, Paris 1921) (holding that Switzerland was entitled to immunity in a suit arising from its charter of ships to transport cocoa for the Swiss chocolate industry during World War I because the venture was not exclusively commercial) ; Etienne v. Gouvernement neerlandais, Dalloz 84 (1948), Annual Digest, Case No. 30 (Tribunal Commercial de la Rochelle 1947) (holding that a ship requisitioned and operated by the Dutch Government to transport wheat for the reprovisioning of the Netherlands was a political rather than a commercial act). But these are decisions of courts of Trance where it is difficult to tell to what extent the restrictive theory of sovereign immunity has been adopted. The French decisions are uncertain and often contradictory. Compare Hamson, Immunity of Foreign States, The Practice of the French Courts, 27 Brit. Y. B. Int’l L. 293 (1950), concluding that the French courts have departed very little from the classical theory of immunity so far as the foreign State itself is concerned, with Lauterpacht supra, 28 Brit. Y. B. Int’l L. at 260, concluding that France can no longer be included among countries adhering to the absolute theory of immunity.

19 E.g., Monnoyer et Bernard v. Etat Francaise, 3 Pasierisie Beige 129 (1927); Etat roumain v. Fascalet et Cie., Dalloz 260 (1924); Stato di Romania c. Trutta, I Monitore dei Tribunali 288 (1926), Annual Digest 179 (1925-26); Societe pour la fabrication des cartouches c. Col M., Ministre de la Guerre de Bulgarie, Belgique Judieiare 383 (1889); Et Ve Balik Kurumu v. B. N. S. Internat’l Sales Corp., 204 N. Y. S. 2d 971 (Sup. Ct. 1960), aff’d 233 N. Y. S. 2d 1013 (A. D. 1962); Pacific Molasses Co. v. Comiste de Ventas de Mieles, 219 N. Y. S. 2d 1018 (Sup. Ct. 1961). See generally, Sucharitkul, supra, at 322, 324.

20 Since in our view sovereign immunity does not apply, we find it unnecessary to consider whether the agreement to arbitrate constituted an implied waiver of sovereign immunity. Compare Duff Development Company, Ltd. v. Government of Kelantan, L. R. [1924] A. C. 797 with Ben Aiad c. Gouvernement tunisien, Dalloz 305 (Cour de Cassation 1897).