Case Citation: 23 N.Y.

2d 46 (1968)

Date: October 15, 1968

Petitioners: Hazel W. French – Ritter’s assignee

Respondents: Banco Nacional de Cuba

Doctrine:
Act of State Doctrine
Hickenlooper Amendment

Antecedent  The case stems from a regulation of the Cuban Government — adopted after Fidel
Facts: Castro's accession to power in January of 1959 — which, in effect, prevented
American and other foreign investors from receiving currency other than Cuban
pesos on their Cuban investments.
 The investor here involved was the plaintiff's assignor, Alexander Ritter, an
American citizen, who resided in Cuba at the time of the events from which this
lawsuit arises.
 In 1957, some two years before the events in question, he invested about $350,000
in a Cuban farm. At that time, the Cuban Government permitted foreign investors
to turn the proceeds from their enterprises into American dollars, or other foreign
currency, and exempted such proceeds from Cuba's tax on the exportation of
money.
 To this end, the Currency Stabilization Fund of the Cuban Government was
authorized to issue "certificates of tax exemption."
 In June, 1959, six months after the inception of the Castro regime, Ritter acquired
eight such certificates, aggregating $150,000
 *51On July 15, 1959, the Currency Stabilization Fund issued "Decision No.
346." Aimed at stopping the flow of foreign currency from Cuba and thereby
preventing a situation "very dangerous" to that country, the Decision suspended
"for the time being processing of" tax exemption certificates "until reorganization
of the system of exemptions".
 The redemption of such outstanding certificates, according to the president of
defendant bank, would have wiped out Cuba's dollar reserves.
 When, in December of 1959, Ritter tendered his certificates for redemption,
together with the appropriate number of pesos, payment in American dollars was
refused under the mandate of the Decision

Petitioner’s That dishonoring and repudiating the certificates where not an act of state since it was not
Contention: published in the official gazzette

Respondent’s Defendant's claims :

Contention: (1) that it was entitled to sovereign immunity from suit as an agency of the Cuban
Government and
(2) that the Decision in question "had the force of law" and was an act of the
sovereign Government of Cuba to which our courts will not deny legal effect.
District Ruling:
The plaintiff, Ritter's assignee, brought the present action, late in 1960, in Supreme Court,
New York County, and obtained a judgment against defendant bank in the amount of
$150,000, with interest

CA Ruling:  A closely divided Appellate Division affirmed rejecting defendant’s claims

[3]

Issue: WON the defendant’s contentions are correct

SC Ruling: On the first of these questions, that of sovereign immunity, the entire court is in agreement
with the Appellate Division, and we dispose of the point very quickly. In view of the State
Department's conclusion (set forth in a note not included in the record) that the activities
out of which the present action arose "were of a jure gestionis [commercial] * * * nature"
and its position that immunity should not be granted in such cases, we must decline to
accord the defendant sovereign immunity from suit. It is "not for the courts to allow
immunity" on grounds "which the government has not seen fit to recognize."

This brings us to the second question presented, whether the act of state doctrine bars the
plaintiff's claim.. yes

52*52It has long been settled,[4] and recently reaffirmed by the Supreme Court in Banco
Nacional de Cuba v. Sabbatino (376 U. S. 398, 416 et seq.), that the courts in the United
States will not inquire into the validity of the acts of a foreign government done
within its own territory. As the Supreme Court stated in Underhill v. Hernandez (168 U.
S. 250, 252) — quoted in Sabbatino (376 U. S., at p. 416) — "[e]very sovereign State is
bound to respect the independence of every other sovereign State, and the courts of
one country will not sit in judgment on the acts of the government of another done within
its own territory.

Our courts will not examine a foreign law to determine whether it was adopted in
conformity with the internal procedures and requirements of the enacting state. The act of
state doctrine, it has been well said, is not limited to situations in which "the foreign act is
committed in a manner `colorably valid' under foreign law. It should make no difference
whether the foreign act is, under local law, partially or wholly, technically or
fundamentally, illegal. * * * So long as the act is the act of the foreign sovereign, it
matters not how grossly the sovereign has transgressed its own laws."

Consequently, there is no basis whatever for the plaintiff's contention that the action
dishonoring and repudiating the certificates held by Ritter was not an "act of state."

Regardless of whether or not Decision No. 346 was published in the Official Gazette
or otherwise complied with internal Cuban standards of regularity, it was issued by
the Currency Stabilization Fund, an official instrumentality of the Cuban
Government

The plaintiff adduced evidence to the effect that the Decision did not conform to Cuba's
fundamental law and that it had not been published in the "Official Gazette." But that was
insufficient, as matter of law, to establish that the action dishonoring and repudiating the
certificates was not an act of state. It was incumbent on the plaintiff to prove that the
 Cuban authorities themselves would deem Decision No. 346 invalid and would disregard
it. This she was obviously unable to do.

As the Supreme Court observed in the far harsher context of Sabbatino (pp. 436-437),
"However offensive to the public policy of this country and its constituent States an
expropriation of this kind may be, we conclude that both the national interest and progress
toward the goal of establishing the rule of law among nations are best served by
maintaining intact the act of state doctrine in this realm of its application."

NOTE: The parties themselves raised no other issues in the courts below or on the original
argument of this appeal.

However, in deference to the views of some of the members of this court, we directed
reargument and, as noted above (p. 49), requested the parties to address themselves, in
essence, to the further question whether the Hickenlooper Amendment covers this case
and bars the court from applying the act of state doctrine.[7]

57*57In our view, the Hickenlooper Amendment is inapplicable. The statute was
enacted to "reverse in part" the decision in Sabbatino So far as relevant, the amendment
declares that "no court in the United States shall decline on the ground of the federal act of
state doctrine to make a determination on the merits giving effect to the principles of
international law in a case in which a claim of title or other right to property is asserted
by any party including a foreign state * * * based upon (or traced through) a confiscation
or other taking * * * by an act of that state in violation of the principles of international
law".

The basic terms of the statute — to come directly to its wording — simply cannot be
made to fit the present case. The amendment applies only if there is a "claim of title or
other right to property" and that claim is "based upon (or traced through) a confiscation or
other taking" of such property.[9]

We must thus attempt to identify the "property" — or the proceeds of such property —
which was allegedly "confiscated or taken" from Ritter by the action of the Cuban
Government. It is quite evident that, before the issuance of Decision No. 346, Ritter had
only two things that are relevant to this action — 59*59 (1) some 150,000 pesos or the
means of obtaining them and (2) a contract made in Cuba, to be performed in Cuba (by
delivery there of a check), and subject, from its inception and at all times since, to the
laws of Cuba.[10] He did not, it must be emphasized, have any fund of dollars with which
this action is concerned nor did he have rights to any specific fund of dollars in the
possession of any other party. What, then, was "taken"?

Ritter's loss is due not to a taking of property but, rather, to the breach of a promise upon
which he had relied. What had happened — and undoubtedly to Ritter's financial loss —
was that the Cuban law which governed the contract had been changed by the
adoption of a government regulation which "suspended," perhaps permanently, the
conversion of pesos into dollars.

In the strictest sense, and within the terms of the statute we are construing, just as no one
 has "taken" the pesos from Ritter, so no one has "taken" the contract from him; it is still
his or his assignee's to enforce, or attempt to enforce, as the present action bears witness.
No other party claims to be possessed of the contract rights that Ritter had acquired. It is
not as though the Cuban Government had assumed title to a contract right or other chose
in action that had belonged to Ritter and had then sought to enforce it against the obligor.

From all that has been said, it is apparent that the Hickenlooper Amendment has no
application to the present case. The present lawsuit does not involve the assertion of a
claim of title to property and, just as clearly, the Cuban Government's action did not
involve a confiscation or taking of property. Certainly, it is not a case in which title or
other right to a specific res (or its proceeds) confiscated by a foreign government is
disputed on a claim either asserted by the original owner and defended by the government
or asserted by the government and defended by the original owner.

It follows that the Hickenlooper Amendment is not applicable, that the act of state
doctrine is decisive and that the defendant must prevail. This being so, it is not
necessary to reach the further question whether the action of the Cuban Government
offended principles of international law.

Since, however, our dissenting brethren have concluded that such action did constitute a
taking of property to which a claim of title or other right is asserted and have gone on to
urge that it violated international law, we treat that question — of international law —
briefly:

The control of national currency and of foreign exchange is an essential governmental

function; the state which coins money has "power to prevent its outflow"

The Restatement of Foreign Relations Law goes on to recite that "the application to an
alien of a requirement that foreign funds held within the territory of the state be
surrendered against payment in local currency at the official rate of exchange is not
wrongful under international law, even though the local currency is less valuable on
the free market than the foreign funds surrendered."

The present refusal of the Cuban Government to surrender American dollars in

order to protect its dollar reserves, though harsh in its effect, would also seem to be
within the limits of international legality.

Even if the present case, then, involved "a claim of title or other right to property" within
the meaning of the Hickenlooper Amendment, the amendment would not permit us to
disregard the act of state doctrine since the Cuban action did not violate
international law.

In sum, then, it is our conclusion that the actions complained of constituted an act of state;
that, under the rule announced in Sabbatino, we are required to give effect to that act of
state; and that, since the record before us establishes that there was no taking of property
to which a claim of title or other right is asserted, the Hickenlooper Amendment does not
apply to require us to disregard the act of state doctrine.

Banco Nacional de Cuba v. Sabbatino

The act of state doctrine is not a rule of international law but of judicial restraint in domestic law, embodied
by the principle of separation of powers, whereby courts refrain from making decisions in deference to the
executive who is the principal architect of foreign relations

Doctrine of State Immunity

The State may not be sued without its consent.
- Based on the principle of equality and independence of states: par in parem non habet imperium.
- With the gradual expansion of state involvement in commerce, the principle of state immunity has evolved to
one of restrictive state immunity: only acts jure imperii (governmental acts) and not acts jure gestionis (trading
and commercial acts) are immune.

FRENCH CASE: claimant brought suit on Cuban-issued certificates of tax exemption for which he was
prevented by Cuban regulation from receiving currency other than Cuban pesos. In dismissing the complaint,
the court held that the intended scope of the Amendment was limited to "specific and identifiable and
'traceable' property."' 3

SABBATINO:
 Farr, Whitlock & Co. contracted to buy sugar from a Cuban corporation.
 The corporation loaded the sugar on to the S.S. Hornfels, but in response to President Eisenhower
reducing the Cuban sugar quota, Cuba issued a decree taking possession of the sugar.
 The Cuban government would only allow the sugar to leave Cuba if Farr, Whitlock entered into a new
contract with Banco Nacional de Cuba, an instrumentality of the Cuban government.
 After the sugar left Cuba, Farr, Whitlock refused to pay Banco Nacional.
 Banco Nacional sued in the U.S. District Court for the Southern District of New York to recover
payment.
 The court granted summary judgment for Far, Whitlock, holding that Cuba’s taking of the sugar
violated international law. The U.S. Court of Appeals for the Second Circuit affirmed.

JUSTICE BURKE
BURKE, J. (dissenting).

I concur in Judge KEATING's dissent and agree with his analysis of the Hickenlooper Amendment.
However, cognizant of the limited jurisdiction of this court, I do not find it necessary to reach that issue.

It has been long settled by our court (Holzer v. Deutsche Reichsbahn-Gesellschaft, 277 N.Y. 474, cited
in Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 425) that the applicability of the act of state
doctrine in a particular litigation may be a question of fact. It is also well established that an affirmed
finding of fact, based upon substantial evidence, will not be reviewed by this court. (See, e.g., the majority
and dissenting opinions in Matter of City of New York [Fifth Ave. Coach Lines] , 22 N Y 2d 613.)
Considering the present appeal in this context, I would affirm the order of the Appellate Division.

Before showing that the finding of the Trial Judge, as affirmed by the Appellate Division — that the act of
state defense was not established — is nonreviewable, it is first essential that the entire factual
background of this case be fully described. Rather than duplicate the majority's recitation of the
"undisputed facts" of this case, I begin by supplementing that effort with additional "undisputed facts".
Alexander Ritter, at the invitation of Cuba's Agricultural Department, purchased a 350-acre farm in Cuba
in 1957. In August of that year, he obtained certificates of tax exemption for $345,000 from the Currency
Stabilization Fund of the Cuban 69*69 Government.[1] In January, 1959, Fidel Castro's revolutionary forces
seized control of the Cuban Government. On January 7, 1959, the United States extended recognition to
the Castro regime as the "provisional government of the Republic of Cuba." Such recognition merely
noted that Castro had seized control of the country and that he had indicated his intention to comply with
the international obligations and agreements of Cuba.[2] In extending recognition in this manner, we in
effect insured the revolutionary forces of an ample supply of American dollars as a result of our continued
underwriting of the sugar subsidy and through the virtually uninterrupted patronage of American tourists.
Shortly thereafter, in either February or March of 1959, Ritter approached Mr. Betancourt, director of the
afore-mentioned Currency Stabilization Fund, to ascertain whether Banco Nacional was going to fulfill its
contractual agreement with him, as embodied in the certificates of August, 1957. In uncontroverted
testimony, he related that Mr. Betancourt advised him that Banco Nacional would "definitely honor the
obligation" IF UPON INVESTIGATION he was found not to be politically implicated (presumably with the
overthrown government) and if his business was conducted without graft. In June, 1959, the eight
certificates involved in this litigation were given to Ritter by the Currency Stabilization Fund in exchange
for his 1957 certificates, purportedly conveying a "guarantee" that Banco Nacional would indeed honor its
obligation.

On July 23, 1959, eight days after Decision No. 346 was enacted by the Fund, Ritter presented one of his
"guaranteed certificates" and immediately received payment on it, thus confirming the guarantee given
him by Mr. Betancourt. On December 11, he tendered his remaining certificates to Mr. Betancourt. As he
recalled the event at trial, "Mr. Betancourt 70*70 then said to me that he was sorry * * * he thought he
would be able to give us [he and his representative bank] the dollars for the certificates but that he could
not." He further testified that the only reason then offered by Mr. Betancourt for not making the payment
was that "he didn't have the money." He also noted that he had waited until December to tender his
certificates at the request of the Currency Stabilization Fund. "In the early Fall of 1959 [after Decision No.
346 was enacted] Mr. Betancourt said to me that the dollar account of the Banco Nacional was low on
funds and that he would appreciate it if I would wait until the sugar harvest * * * they would have more
funds available later in the year."

I now turn to the two claims advanced by defendant in this litigation — (1) that it was entitled to sovereign
immunity from suit as an agency of the Cuban Government and (2) that Decision No. 346 was an act of
the sovereign Government of Cuba, an act of state immune from examination by our court.

As the majority quite properly declares (p. 51), "the entire court is in agreement" in rejecting the sovereign
immunity claim. I am opposed, however, to the majority's acceptance of the act of state claim as a matter
of law in this litigation. Their conclusion, in effect, contradicts even the position adopted by the defendant
at the time of the trial. At that time defendant presented only one witness, a Cuban lawyer, who gave
expert testimony concerning both Decision No. 346 and its applicability to Ritter. It would, therefore,
appear that 71*71 even the defendant considered the applicability to be a question of fact. Moreover, while
testimony was presented by an expert witness, it cannot be said that this alone proved conclusively
that Decision No. 346 applied here as a matter of law. As Judge BERGAN stated so recently in
another case "few things are better settled than that the trier of the fact is not bound helplessly by opinion
evidence offered by a party having the burden [of proof]." (Matter of City of New York [Fifth Ave. Coach
Lines], 22 N Y 2d 613, 629, supra.)

It is plaintiff's contention that Decision No. 346, an act of the Cuban Government, was not intended to and
did not apply to these eight "guaranteed certificates".

…
While plaintiff's certificates bear the legend that they were issued "in accordance with the provisions of

Whether or not these specific eight certificates are within the ambit of Decision No. 346 as stated above is
and was treated by all parties at the trial, as a question of fact. Thus, when Supreme Court Justice
MARKEWICH dismissed the act of state defense for failure of proof, he concluded that the record before
him which included expert testimony was inadequate to establish defendant's claim that Decision No. 346
applied to these eight certificates. The singular issue before this court with respect to the act of state
defense is whether there is sufficient evidence in this record to sustain the determination of our lower
courts. If there is, then we, an appellate court, possessing very limited jurisdiction, must affirm.

72*72The significance of determining who has the burden of proof in this case is now academic, since
proof has been presented. The majority nevertheless takes issue with the lower court's determination that
defendant had the burden of proof by stating that "It was incumbent on the plaintiff to prove that
the Cuban authorities themselves would deem Decision No. 346 invalid and would disregard it. This she
was obviously unable to do." (Emphasis added.) Employing the majority's criteria, the act of state claim
will hinge upon whether plaintiff has shown that the Cuban authorities — in this case, the Currency
Stabilization Fund — had treated Decision No. 346 as either invalid or inapplicable to her eight
certificates. The record, I submit, establishes that the Cuban authorities did disregard Decision No. 346
when dealing with the plaintiff's certificates.

On July 23, 1959, eight days after Decision No. 346 was enacted, Ritter received a check for $45,000, as
payment for a certificate of that amount. Plaintiff has established that payment. Defendant has not denied
that the payment was made, it has not suggested that the payment was made in error. Is this evidence
that the Cuban authorities did disregard Decision No. 346 insofar as Ritter was concerned? Could this
indicate that his certificates were unaffected by Decision No. 346? Can we then say that the trial court had
sufficient evidence before it to consider the application of the act of state doctrine as a question of fact?
The answer in each instance must be in the affirmative.

Other acts of the Fund raise doubts regarding the genuineness of the act of state defense, tardily invoked
by the defendant.

Five months after his first certificate was honored by the Currency Stabilization Fund, Ritter tendered his
remaining certificates to Mr. Betancourt of the Currency Stabilization Fund. According to Ritter's
undisputed testimony, he waited until December to tender his certificates at the request of the Currency
Stabilization Fund. This Fund is the official instrumentality of the Cuban Government. This Fund issued
the first set of certificates in 1957, and later replaced them with new certificates at Ritter's insistence. This
Fund issued Decision No. 346 temporarily suspending the "processing of certificates of exemption".
Nevertheless, despite the clear terms of Decision No. 346, this is the Fund that honored one
of 73*73 Ritter's certificates on July 23, and then, in the fall, expressed an intention to honor his remaining
certificates. Thus plaintiff has shown how the Cuban authorities, specifically the Currency
Stabilization Fund, at times did disregard Decision No. 346 in dealing with Ritter's certificates.

The majority has assumed that because the courts in the United States will not inquire into the
validity of the acts of a foreign sovereign done within its own territory, then a fortiori, neither can it
question whether a conceded act of state applies in a particular instance. If this be so, then prior
decisions of our courts, cited with approval by the Federal courts, are this day overruled.

A prior decision of this court, cited at the outset of this opinion, Holzer v. Deutsche Reichsbahn-
Gesellschaft (277 N.Y. 474, supra) seems directly in point with this present litigation. The plaintiff in that
case, a German Jew, was employed by a German corporation which was an instrumentality of the
German Government, under a contract of employment which provided that "in the event the plaintiff
should die or become unable, without fault on his part, to serve during the period of the contract the
defendants would pay to him or to his heirs the sum of 120,000 marks, in discharge of their obligations,
under the hiring aforesaid". On April 7, 1933, the German Government issued a law, allegedly intended to
"purify" the Civil Service System of that country. In effect, that law required that persons of non-Aryan
descent, engaged in any of the leading commercial, industrial or transportation enterprises, be retired
immediately. Plaintiff spent his first months of retirement in prison, and was then removed to a
concentration camp. Upon his release, he brought an action in this country, against his employer,
acquiring jurisdiction by attaching property. Plaintiff's complaint set forth alternative causes of action. In
his first cause of action, he stated that he had fulfilled all the requirements of this contract and that
"defendants discharged [him] * * * upon the sole ground that [he] is a Jew." He further pleaded that "As a
result of such discharge the plaintiff was damaged in the sum of upwards of $50,000, no part of which has
been paid although duly demanded." His second cause of action stated in part that he "became unable,
without any fault on his part, to continue his services from the month of April, 1933, when he was
imprisoned 74*74 * * * The plaintiff accordingly became entitled under his contract to the sum of 120,000
marks, the payment of which was prescribed in the terms of his hiring for that event, no part of which has
been paid to him although duly demanded. * * * By reason of the premises the plaintiff was damaged in
the sum of about $50,000."

The responsive pleadings in that case are also significant. The second separate defense, interposed
against both causes of action, was as follows: "The plaintiff was of non-Aryan descent and was within the
classes specified and required to be retired by said laws and decrees of said Government, and the plaintiff
was duly retired * * * and the plaintiff's employment thereunder [was] duly and lawfully terminated * * *
under and pursuant to said Law * * * and the further performance of the plaintiff's alleged contract of
employment by all parties thereto was thereby prohibited and made unlawful". (Emphasis added.) In sum,
defendant argues that they were relieved entirely from further performance of the contract by an act of
state. The case came before this court solely on the sufficiency of the complaint and the effect of the
second defense upon the entire action. It was the unanimous opinion of this court that "in respect to the
first cause of action, we are bound to decide, as a matter of pleading, that the complaint does not state
facts sufficient to constitute a cause of action and that the second separate defense of the answer is
sufficient in law upon its face. Defendants did not breach their contract with plaintiff. They were forced by
operation of law to discharge him." (277 N. Y., p. 479; emphasis added.) The court then proceeded to
sustain the second cause of action, noting the existence "of questions of fact which must be determined
on the trial." (277 N. Y., p. 480; emphasis added.) Thus, the mere allegation that the act of state defense
applied to all the clauses of the German contract did not preclude this court from requiring proof that the
act of state did in fact apply in a particular situation. Hence, the reference in Holzer to "questions of fact
which must be determined". To require a determination of whether the act of state defense applied to the
severance provision of this German contract seems identical to the burden imposed on the respondent in
this case; specifically to show by credible evidence that the act of state defense applied to Ritter's eight
certificates. As the Supreme Court clearly stated in 75*75 Ricaud v. American Metal Co. (246 U. S. 304,
309): "When it is made to appear that the foreign government has acted in a given way on the subject-
matter of the litigation, the details of such action or the merit of the result cannot be questioned but must
be accepted by our courts as a rule for their decision." By concluding that Ritter cannot recover on his
certificates because there was no provision for payment of any sum in the event of dishonor, Justice
HOPKINS has misapplied the test. The sole factual question here to be determined is whether the
act of state applied to the subject matter of the litigation — Ritter's eight certificates. The
interpretation of Holzer, proposed in the concurring opinion, that it "might be found as a fact * * * that the
contract contemplated payment of the agreed sum upon the occurrence of the very act of state which
prevented plaintiff's performance" seems illogical as the act of the German Government prohibited and
made unlawful any further performance of the contract BY EITHER PARTY and directed that its provisions
be enforced "without recourse to courts and other legal remedies". Moreover, it appears to conflict with the
act of state doctrine, as expressed in the majority opinion.

Here we do not have mere pleadings, as in Holzer. The case is before us after a trial where plaintiff
proved part performance of the guarantee given Ritter when his replacement certificates were issued in
1959. Thus, it was shown that after Decision No. 346 was enacted, payment was made on one certificate
by defendant and that Ritter was thereafter requested twice to refrain from presenting his remaining
certificates for payment for reasons altogether unrelated to, and inconsistent with, Decision No. 346. This
evidence presented a triable issue of fact, i.e., whether Decision No. 346 was at all relevant to
these specific certificates. To establish its relevancy, the defendant relied on the testimony of an expert
witness. The Trial Judge, who passes on both the credibility of a witness and the weight of the evidence in
general, found this testimony insufficient. In so doing, he acted within the bounds of his authority. While
the concurring opinion acknowledges the present vitality of both Holzer and Ricard, it has failed to apply
the principle of those cases in this instance.

In summary, I am of the opinion that a question of fact was presented as to the applicability of the
act of state defense to 76*76 the subject matter of this litigation; that there is evidence to support the
finding of the trial court, and that, in reviewing the record, this court may not review this affirmed
finding of fact. The words of Chief Judge CRANE in Dougherty v. Equitable Life Assur. Soc. (266 N.Y.
71, 88), another decision by this court involving the act of state defense, seem particularly pertinent: "The
language of any opinion must be confined to the facts before the court."

KEATING, J. (dissenting).

I am in agreement with Judge BURKE that the evidence does not establish that Decision No. 346 was
applicable to plaintiff's certificates because of their unique character. But even if these certificates were
within the ambit of Decision No. 346, it seems unalterably established that the act of state defense is
inapplicable because what is involved here is no mere "breach of contract", but a confiscation clothed in
the disguise of a valid currency regulation.

We all accept the defendant's strenuously urged position that it is a "governmental instrumentality" of
Cuba. In fact, no one disputes this. It has been nationalized by the Cuban Government and all its property
is that of the Government of Cuba. Being an instrumentality of the Cuban Government, it is not an
innocent third party, which — under the clear intent of the Congress — can invoke the act of state doctrine
to protect itself from multiple liability or to plead impossibility of performance.

Decision No. 346 is an act of defendant's master and, if that act constitutes a confiscation in contravention
of international law, it should be no defense here.

In Perutz v. Bohemian Discount Bank (304 N.Y. 533 [1953]), this court states: "A contract made in a
foreign country by citizens thereof and intended by them to be there performed is governed by the law of
that country. * * * Our courts may, however, refuse to give effect to a foreign law that is contrary to our
public policy. * *

In light of these facts the validity of Decision No. 346 under international law could not conceivably
be determined without 93*93 considering the effect of other Cuban currency and economic
regulations upon it. Nor can its validity be sustained merely by referring to the circumstances
which justified its enactment or what presently exists as the theoretical justification for its
existence. Decision No. 346 must be viewed as one of a great number of regulations enforced to
implement the Cuban Government's policy of expropriating the property of foreigners. Despite the
unsettled nature of many international law questions, one certain conclusion is that Cuba's nationalization
program without compensation constitutes a violation of international law (Banco Nacional de Cuba v.
Sabbatino, 376 U. S. 398 [dissent, pp. 455-456], supra; First Nat. City Bank v. Banco Nacional de
Cuba, supra; Restatement, 2d, Foreign Relations Law of United States, § 192; see, also, Banco Nacional
de Cuba v. Farr, supra).

Under the guise of what the majority chooses to call a currency regulation, there has been an
expropriation here, and no amount of discussion concerning the currency problems of the postwar world
can make it otherwise. This is no devaluation or temporary suspension. Eight years of no payments and
no substitute arrangements for making adequate compensation is a sufficient period in which to establish
an unlawful taking. Plaintiff's claim here to the property that she has attached has now become a claim
"based upon * * * a confiscation or other taking * * * in violation of principles of international law".
Consequently, the act of state defense may not be interposed by defendant here. The plaintiff is entitled to
judgment.