The Act of State Doctrine after Sabbatino

The United States Supreme Court recently decided, in Banco Nacional de Cuba v. Sabbatino, that American courts must enforce a recognized foreign government’s expropriation decree even though the decree violates international law. The Court, contrary to the views of respected international lawyers, found this result dictated by the “act of state doctrine,” which bars American courts from reviewing the validity of another nation’s official acts. The decision, amid frequent revolutionary confiscations and national programs of expropriation, seriously draws into question the wisdom of further investments in developing countries. This is unfortunate because American foreign investments benefit the receiving country as well as the investor and ultimately contribute to international cooperation and world peace. This comment explores the meaning and scope of the act of state doctrine, as the Supreme Court applied it in Sabbatino.