Verlinden B.V. v. Central Bank of Nigeria case brief, 461 US 480 (1983)

Verlinden B.V. v. Central Bank of Nigeria, 461 US 480 (1983)

FACTS

-       Dutch company entered into a contract with Nigeria for cement; the Nigerian government established, through the Central Bank of Nigeria, a letter of credit through a bank in NYC; Central Bank then failed to pay
-       Dutch company brought suit in US court for breach of contract under the FISA
-       (note: It is moot whether the US has prescriptive jurisdiction here because the US was not bringing the suit)
-       Issue 1: Can foreign plaintiffs sue foreign states under the FSIA?

• This case says yes.
• Why might this be a question?
  • If anyone, anywhere can bring a suit in US courts against a foreign state, there is a concern that the US will become a sort of universal claims court
  • However, the FISA has a way of preventing the US from becoming a universal claims court: each exception requires some kind of nexus to the United States (except the waiver exception)
    • The nexus to the US here is the credit that the US bank extended to Nigeria

-       Issue 2: Must a federal court apply the FSIA in a suit against a foreign state, even if the foreign state doesn’t raise the issue of immunity?

• According to this case, yes…
• Footnote, Even if the foreign state doesn’t plead immunity under the FSIA, the court must make a determination whether one of the exception to immunity applies in order to have jurisdiction over the foreign state (a state can’t waive immunity by not pleading it)

-       In the instant case, the court found that the entity being sued was indeed a state: the Bank was an instrumentality of Nigeria