International Law – Sovereignty – Judicial Examination of Foreign Act of State Under International Law

In retaliation for a reduction of its sugar quota by the United States the Cuban government nationalized certain Cuban enterprises in which United States citizens held majority interests. Defendant had earlier contracted to purchase a shipment of sugar from one of the nationalized Cuban corporations. To obtain permission to remove the shipment from Cuban waters, defendant was forced to execute another contract with plaintiff’s assignor, an agent of the Cuban government, which agreement embodied terms identical to those in the original contract with the exception that payment was to be made to plaintiff’s assignor. Upon learning that a receiver of the nationalized corporation also claimed the right to them, defendant paid the proceeds of the sale into court, and plaintiff brought an action for conversion in federal district court. On defendant’s motion for summary judgment, held, complaint dismissed. The nationalization decree violated international law and will not be recognized as having vested title to the sugar in plaintiff’s assignor. Banco Nacional de Cuba v. Sabbatino, 193 F. Supp. 375 (S.D. N.Y. 1961).