Banco Nacional de Cuba v. Sabbatino
376 U.S. 398 (1964)
A US sugar distributor, Farr
Whitlock and Co. contracted with a US-owned sugar producer in Cuba,
Compania Azucarera Vertientes-Camaguay de Cuba (CAV), to import sugar into
As part of a trade dispute,
the government of Cuba nationalized their sugar industry and seized the
assets of several US-owned sugar producers, including CAV.
CAV still made the delivery,
but Farr didn't send the payment to the Cuban government, instead they
paid CAV's legal representative in the US, Sabbatino.
Banco National de Cuba (BNC)
sued Sabbatino in US Court to get them to hand over the money for the
BNC argued that the Cuban
nationalization was an official Act of State and should be honored by the US.
The Act of State
Doctrine says that the propriety of
decisions of other countries relating to their internal affairs would
not be questioned in US courts.
Sabbatino argued that the Act
of State Doctrine was inappropriate
The act in question was a
violation of international law;
The doctrine should not be
applied unless the Executive branch asks the court to do so;
Cuba had brought the suit
as a plaintiff and had given up its sovereign immunity.
The Trial Court found for
Sabbatino. BNC appealed.
The Appellate Court affirmed.
The US Supreme Court reversed.
The US Supreme Court found that
the policy of US Federal courts would be to honor the Act of State
The Court found that the
Cuban seizure did not violate international law, because there was no
clear international opinion that a seizure of land or property in a
country by the government of that country was illegal.
The Court found that there
was no need for the Executive branch to ask the courts to apply the Act
of State Doctrine.
The Court found that it
should be assumed to apply because if even a single court made a
mistake and failed to apply it, it could mess up US relations with
The Court found that the Act
of State Doctrine still applied,
even thought the State was a plaintiff.
Similar to the idea of sovereign
immunity where States can sue, but
cannot be sued.
In response to this decision, Congress
passed the Second Hickenlooper Amendment (aka the Sabbatino Amendment) that revoked the presumption in favor of the validity of the Act
of State Doctrine.