462 U.S. 611 (1983)
Respondent foreign government sponsored entity brought an action on a letter of credit issued by petitioner bank, to which petitioner filed a counterclaim relating to the expropriation of its assets by respondent's sovereign.
- Holding that traditional principles permitting the disregard of corporate forms applied to foreign government sponsored entities, the Supreme Court reversed the judgment for respondent.
- The Court held that the Foreign Sovereign Immunities Act of 1976, 28 U.S.C.S. § 1607, stripped respondent of immunity with respect to petitioner's counterclaim.
- The Court held that the fact that petitioner's counterclaim stemmed from the act of respondent's sovereign, and not respondent, did not entitle respondent to immunity, because § 1607 did not alter any substantive law.
- The Court held that while the corporate "veil" of separate juridical entities should not be readily "pierced," under principles of federal and international common law, it was appropriate to disregard respondent's independent status and attribute its sovereign's acts to it, where respondent had been dissolved and its assets distributed between a government ministry and another government sponsored entity.
The court reversed the judgment for respondent foreign government sponsored entity, and remanded for findings regarding the value of petitioner bank's counterclaim, because respondent was not immune from the effect of its sovereign's acts, and to give effect to respondent's separate juridical form would ignore traditional equitable principles that set aside that form in circumstances where the controlling entity would benefit unjustly.
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