Points of law

1) Foreign States are only entitled to restricted jurisdictional immunity. The immunity does not extend to cases in which the State has acted in its civil capacity.

2) There is no rule of international law requiring an obvious link between the territory of the State where the jurisdiction is invoked and the activity in question.

3) If a State enters into a legal relationship on an equal footing with the other party, it makes no difference that the transaction has been concluded under an enabling Act, nor that the contested activity has a military or strategic character.

4) International law is not opposed to any execution against foreign State-owned property situated in the territory of another State.

Summary of the case

In 1932, the appellant concluded an agreement with the respondent for the construction of a railroad in Yugoslavia. Since there were difficulties with regard to the payments, the appellant submitted the question to arbitration at Lausanne. In the arbitral award the respondent was ordered to pay a certain sum. However, although the Court of Appeal granted no immunity to Yugoslavia, it found itself unable to execute the award.

Sources

RvdW (1973) No. 64; N.J. (1974) No. 361.4.

English summary: NYIL 1972, p. 290-296.

Additional information (explanations, notes, etc.)

Summaries of the proceedings before the District Court and the Court of Appeal can be found in NYIL 1972, p. 294 and NYIL 1973, p. 390-391.

A summary of the decision of the Court of Appeal to which the case was remitted can be found in NYIL 1975, p. 374-377.