Embassy Law Web Log   
Washington, DC, USA      

Malta Flag Immunity

The French Supreme Court upheld Malta's immunity claim in a case involving an oil spill by a Malta-flagged tanker near the French coast. The French government sought to subject the Maltese government to its jurisdiction, apparently based on a theory of rogue flags not being entitled to immunity. The Times of Malta published a summary of the proceedings and issues.   -   by Clemens Kochinke, partner with Berliner, Corcoran & Rowe, LLP in Washington.

Immunity and Terror Exception

Today, in Price v. Libya, the District of Columbia Circuit Court of Appeals decided an FSIA case involving the limitation of immunities under the terrorism exception. The matter involves the detention of plaintiff in Libya.   -   by Clemens Kochinke, partner with Berliner, Corcoran & Rowe, LLP in Washington.

No American Tax on Foreign Military

On November 4, 2004, the United States Court of International Trade confirmed in a slip opinion in the matter Nippon Express USA Inc. v. United States, No. 97-12-02187, that imports for foreign military assigned to duty in the United States are exempt from the Harbor Maintenance Tax despite the lack of exemption in the rules for the tax, 26 USC §4461. The HMT constitutes, however, an "internal revenue tax" for purposes of a specific exemption in the Harmonized Tariff Schedule of the United States ("HTSUS"), 9809.00.30 that turns on reciprocal exemptions for foreign and American military.   -   by Clemens Kochinke, partner with Berliner, Corcoran & Rowe, LLP in Washington.

Attaching an Arbitral Award

Iran won an award in ICC arbitration against a U.S. supplier of military equipment. May parties holding default judgments against the nation enforce their judgments into the award?

The United States Court of Appeals for the Ninth Circuit allowed one of two holders to garnish the award in satisfaction of his default judgment, in the matter of The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems Inc. et al., No. 99-56498, on October 7, 2004, and denied Iran's immunity claim against a claim not already satisfied by Victims of Trafficking and Violence Protection Act of 2000, 114 Stat. 1464.

The court addresses two separate claims and, in addition to the special rules governing the assets of Iran, such as the Iranian Transactions Regulations, 31 CFR part 560, discusses extensively the applicable provisions of the Foreign Sovereign Immunities Act and the effect of a immunity waiver for ICC arbitration on subsequent enforcement action in United States courts which affect most sovereigns with assets or claims located in the United States.   -   by Clemens Kochinke, partner with Berliner, Corcoran & Rowe, LLP in Washington.

Congo Tax Garnished in US

The garnishment of taxes accrued in the United States for the benefit of the Rupublic of Congo under oil transaction contracts is subject to the commercial exception of the Foreign Sovereign Immunities Act of the United States, the United States Court of the Appeals for the Firth Circuit held in the matter of Af-Cap Inc. v. The Republic of Congo, case number 03-50506, on September 17, 2004.

The case involves a highway construction contract and a bank loan which comprises a contractual waiver of sovereign immunity for the collateral which involves revenues from oil transactions, among others, which are to secure payment for the bank loan. The bank loan was made with Equator Bank Ltd. and assigned to a Connecticut, USA, bank which obtained a default judgment on it against the Congo in a London court. That judgment was recognized and enforced by a court in New York. On that basis, a garnishment was had in Texas on obligations by certain companies to pay taxes and royalties to the Republic.

The appeals court held that these payment obligations constituted commercial property of the Congo and are not protected by the Foreign Sovereign Immunities Act, as their situs is also the United States.   -   by Clemens Kochinke, partner with Berliner, Corcoran & Rowe, LLP in Washington.

Service on former President

In the matter of Ye v. Zemin, docket number 03-3989, the United States Court of Appeals for the Seventh Circuit had to decide the issue whether an attempt toserve a complaint on a former president of a foreign nation could be impermissible. In light of arguments proferred by the executive branch of the United States government to the effect that service would foil objectives of the United States in the diplomatic arena, the court determined that such objectives could bar service.

No Bank, no Mission

Under Article 25 of the Vienna Convention on Diplomatic Relations, the receiving state shall accord full facilities for the performance of the functions of the mission. On this basis, states must offer each other the opportunity to fullfil all diplomatic functions according to Article 3 of the Convention. That includes the obligation to offer an adequate infrastructure for diplomatic missions.

Whether the United States of America is in violation of the Convention with respect to the necessity of a bank account has become an virulent issue. An investigation into practices of the major bank for diplomatic missions in Washington, Riggs Bank, forced embassies to close after the American government ordered Riggs to leave the diplomatic sector and other banks refused to enter it, despite the personal intervention of the Secretary of State. Today's Wall Street Journal at C1cites a number of practical issues--and the retaliatory threat against the United States to bar banks from providing banking services to American missions.   -   by Markus Stoeterau, a lawyer currently in an internship with Berliner, Corcoran & Rowe, LLP in Washington.

Exception to FSIA

The terrorism exception to the Foreign Sovereign Immunities Act applies in the case of a murdered American, the United States District Court for the District of Columbia decided on July 30, 2004 in the matter of http://caselaw.lp.findlaw.com/data2/circs/dc/037117a.pdfKilburn v. Islamic Republic of Iran, docket number 03-7117.   -   by Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

United States Terror Report

The United States Commission examining the 9/11 terror published its final report. Findlaw lists laws on terrorism and cases.   -   by Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Congo Waiver and Arbitration

One June 8, 2004, the D.C. Circuit appeared to expand jurisdiction over foreign nations under the Foreign Sovereign Immunities Act. Ultimately, the ruling in the matter of Gulf Resources Am., Inc. v. Republic of Congo, docket number 03-7118, would appear, however, to involve a matter of contractual construction.

The Republic had waived its immunity in a contractual framework for commercial oil transactions and also agreed on arbitration. Later, another oil company sued the Republic on breach of contract and torts claims. The Republic won in the District Court which found the waiver not to apply.

The Court of Appeals examined the framework contract and determined that its terms were to apply to other companies which, at a minimum, were contractual beneficiaries. While the term waiver applied only to the principal contractual party, the court found other language covering such beneficiaries to have no other but the meaning of a waiver. Since the waiver applied, the court declined to examine whether the Republic may have lost the FSIA protection under the exception for commercial activities. The case was remanded to the District Court which may now determine whether the parties are bound by the arbitration clause.   -   by Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.