Argentine Republic v. Amerada Hess Shipping Corp. case brief, 488 US 428 (1989)

Argentine Republic v. Amerada Hess Shipping Corp., 488 US 428 (1989)


-       Here, two Liberian corporations sued the Argentine Republic in a US district court to recover damages for a tort committed by its armies on the high seas in violation of international law
-       The plaintiff did not bring suit under the FSIA, but under the Alien Tort Claims Act (28 USC 1350) (ATCA)

• On its face, does the ATCA give jurisdiction?

-       The Court determines that suit against a foreign sovereign can only be brought under the FSIA, and not under the ATCA – the FSIA is the sole basis for obtaining jurisdiction over a foreign state in US courts.
-       The court then determines that even if the plaintiffs had brought suit under the FSIA, they still cannot establish jurisdiction over Argentina.

• The court looks at whether any of the exceptions in the FSIA apply, and if there is a sufficient nexus with the US, and found that there was none.
  • Tort exception does not apply because the injury did not occur in the US (this is not referring to the ATCA).
  • Commercial activity exception does not apply.

Commercial Activities Exception
-       The act in question must involve commercial activity…what does this mean? (Congress wasn’t very specific)
-       Every word of this exception matters – read it very carefully.
-       Section 1603(d) of FSIA:

• A suit can satisfy this exception in any one of three different ways: the suit must be based on
  • 1) a commercial activity carried on in the US by the foreign state,
  • 2) an act performed in the US in connection with the commercial activity of the foreign state elsewhere, or
  • 3) an act outside the territory of the foreign state elsewhere and that act causes a direct effect in the US.
• Commercial character of a transaction is to be determined with reference to the nature of the course of conduct rather than by reference to its purpose.
  • Basically, it’s an activity that a private party could engage in for profit.
    • Republic of Argentina v. Weltover, Inc. (p. 573) – the government act doesn’t necessarily have to be for profit – it has to be something a private party would do in trade or commerce.
  • Example: foreign army purchases food from a US company and the company wants to bring a suit for breach of contract against the foreign sovereign – this suit will be based on a commercial transaction, and would fall under the FSIA.
    • According to the FSIA, the fact that the purpose was to use the food for a political purpose (to feed an army) doesn’t matter – the nature of the act (contract) was commercial.
• Commercial activity can be a course of commercial conduct or a particular transaction.

-       Note: in these cases, conduct is never always inherently commercial or inherently sovereign; it’s not always a straightforward case, and the waters are muddy.