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20 Syracuse L. Rev. 705 (1968-1969)
Mitigating the Rigors of the Act of State Doctrine: The General Principles of Law Recognized by Civilized Nations

handle is hein.journals/syrlr20 and id is 721 raw text is: MITIGATING THE RIGORS OF THE ACT OF STATE DOCTRINE: THE GENERAL PRINCIPLES OF LAW RECOGNIZED BY CIVILIZED NATIONS INTRODUCTION The revolutionary reform activity of the Castro regime in Cuba has prompted a march of plaintiffs to American courts to litigate questions relating to the impact of Cuban nationalization decrees on their property. Central in this litigation has been the question of the application of the act of state doctrine. The act of state doctrine, in its traditional formulation, precludes the courts of this country from inquiring into the validity or invalidity of the public acts of a foreign sovereign power committed within its own territory. I It is an Anglo-American doctrine of judicial deference to the executive's primacy in the field of foreign affairs. The justification for the application of the act of state doctrine is that if a court were to declare the governmental act of a foreign state contrary to law and proceed to judgment, a breach of international comity would result, causing serious embarrassment to the executive's conduct of foreign relations. In the context of a taking of private property, the result of the application of the doctrine in its traditional form is that a court is deemed incompetent to declare the governmental act constituting the taking as wrongful.2 During the summer of 1960, Cuban authorities, acting under a nationalization decree, took possession of a quantity of sugar belonging to Compania Azucarera Vertientes-Camaquey de Cuba (CAV), a Cuban corporation, ninety percent of whose stock was owned by American nationals. The Cuban government sold the sugar on the world market through a New York broker, Farr, Whitlock and Company. Contending that the proceeds of the sale were its own, CAV filed action in the New York Supreme Court under Section 977-b of the New York Civil Practice Act3 seeking the appointment of a receiver (Sabbatino) to conserve the proceeds of the sale. In response, Banco Nacional de Cuba filed suit in the United States District Court for the Southern District of New York, and moved for summary judgment to recover the proceeds of the sale. The defense pleaded that the decree nationalizing CAV's property was unenforceable in the United States being violative of international law. The district court held, first, that no cognizance should be taken by the court of the act of state I. Underhill v. Hernandez, 168 U.S. 250 (1897). 2. .S,', RESTATEMENT (SECOND), FOREIGN RELATIONS LAW OF THE UNITED STATES § 41, comments b-d, at 125-27 (1965). 3, N Y. CI\ PRAC ACT § 977-b. The section provides for the appointment of a receiver to manage the remaining assets of nationalized foreign corporations for the benefit of New York creditors and stockholders. This provision is now contained in N.Y. Bus. CORP. LAW §§ 1202- 03, 1207, 1218 (McKinney 1963).

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