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the government for the effective administration of the are inconsistent, no succession occurs. In this view, suc-
country; it is political in character, concerns the relation of cession is a presumption, which can be rebutted by posi-
the population to the state, and pertains to the preroga- tive legislation of the new state. 106 Recent practice indi-
tives of sovereignty. Private law, on the other hand, cates that new states generally make legislative provision
governs the relations between individual citizens and only for continuity of the internal legal order, with the
indirectly concerns the administration of the country. 104 qualification that continuity must be consistent with the
b. The traditional view held that private law survives change in sovereignty. 107 Sometimes, both the pre-
change in sovereignty, legal control, or international decessor state and the new state make legislative provision
status, but that public law does not. 10s This view, for succession to the legal system. For instance, in the case
however, does not accord with state practice. An alterna- of India, Britain provided for continuity of the legal system
tive approach, which seems closer to actual practice, is in the India Independence Act, 108 while India provided
that if the laws of the new state and the predecessor state for continuity in the Indian Constitution. 109
are consistent, succession takes place, but that if the laws
Section 111. THE ACT OF STATE DOCTRINE
7-24. The Conceptual Framework. a. Definition. In the munity from suit has to be resolved.
Anglo-American legal world, a legal consequence deriv- 7-25. The Court-Made Doctrine in the U.S. Analysis of
ing from high-level state action> legal result outside the the act of state doctrine as applied in the United States
ordinary field of private law-is labeled an "Act of State." must begin with the decision most often cited in comec-
As are many of the aspects of state responsibility, this par- tion with the concept, Banco Nacional De Cuba v. Sab-
ticular concept is currently in a state of flux and is some- batino, Receiver.
what controversial in nature. This doctrine must not be BANCO NACIONAL DE CUBA V. SABBATINO,
confused with the concept of jurisdictional immunity. RECEIVER
Although interrelated in many ways, it is essential to United States Supreme Court, 1964.
differentiate between these two principles if both are to be 376 U.S. 398, 84 S.Ct. 923.
understood and correctly applied. As noted earlier, juris- MR.JUSTICE HARLAN
delivered the opinion of the Court.
dictional immunity stands for the proposition that an The question which brought this case here, and is now found to be
agent or agency of a state government, when acting on the dispositive issue, is whether the so-called act of state doctrine serves
to sustain petitioner's claims in this litigation. Such claims are ultimately
behalf of that government, may not be subjected to the ju- founded on a decree of the Government of Cuba expropriating certain
risdiction of another state's courts, regardless of where the property, the right to the proceeds of which is here in controversy. The
alleged cause of action occurred. In short, jurisdictional act of state doctrine in its traditional formulation precludes the courts of
immunity has no territorial limitation. 110 On the other this country from inquiring into the validity of the public acts a recog-
hand, the act of state doctrine stands for the proposition nized foreign sovereign power committed within its own territory.
In February and July of 1960, respondent Fan, Whitlock & Co., an
that the courts of one state will not judicially review the American commodity broker, contracted to purchase Cuban sugar, free
acts of another state, when these acts are taken within the alongside the steamer, from a wholly owned subsidiary of Compania
territorial boundaries of the latter. Azucarera Vertientes-Camaguey de Cuba (C.A.V.), a corporation
b. An unresolved question exists as to whether the organized under Cuban law whose capital stock was owned principally by
widely-shared disinclination to declare invalid the act of United States residents. Farr, Whitlock agreed to pay for the sugar in
New York upon presentation of the shipping documents and a sight '
governance of another state is merely a recognized princi- draft.
ple of international relations or a rule of international law. On July 6, 1960, the Congress of the United States amended the
In the U.S., the earlier cases on the act of state doctrine Sugar Act of 1948 to permit a presidentially directed reduction of the.
usuallv involved cases where the plaintiff and the defen- sugar quota for Cuba. On the same day President Eisenhower exercised
dant were both private parties and the plaintiff mounted the granted power. The day of the congressional enactment, the Cuban
the attack. The major cases in recent years, however, have Council of Ministers adopted "Law No. 851," which characterized this
involved a foreign state as plaints, and the defendant has reduction in the Cuban sugar quota as an act of "aggression, for political'
purposes" on the part of the United States, justifying the taking of
attacked the legitimacy of the foreign law on which the countermeasures by Cuba. The law gave the Cuban President and'
plaintiff relies. In the older cases, the immunity of a state Rirne Minkter btionary pow to nationalize by forced expropriation
was never involved; in later cases, with the foreign state as property or enterprises in which American nationals had an interest.
plaintiff, interrelationships between immunity to counter Although a system of compensation was formally provided, the
possibility of payment under it may well be deemed illssory. Our State
claims and act of state may be involved. In the most recent Department has described the Cuban law as "manifestly in violation of
development, a private party is generally suing a state
engaged in trade for an alleged invalid act of nationaliza- 106. Id. at 107.
tion/and before the act of state is reached, and issue of irn- 107. Id. at 118.
108. India Independence Act, 10 and 11 Geo. 6, chap. 30, 8 118
104. 1 O'Connell, State Succession in Municipal Law and Interna- (1 947).
tional Law 101-41 (1967). 109. Constitution of India, art. 372(2).
105. Id. at 104. 110. See para. 5-2, chap. 5.