The Foreign Sovereign Immunities Act of 1976 determines whether a federal or state court in the U.S. may exercise jurisdiction over a foreign state. Under 28 USCS § 1330, districts courts have original jurisdiction over a foreign state with respect to matters where a foreign state does not have immunity. Foreign sovereign immunity is not a grant by constitution, but a grant based on agreement between the nations or a privilege on the part of the U.S.. Foreign sovereign immunity is confined to suits involving foreign sovereign’s public acts, and does not extend to cases arising out of foreign sovereign’s strictly commercial acts.[i]
However, a vessel in possession and service of a friendly foreign government is exempted from the U.S. admiralty jurisdiction. Historically international law has provided immunity to vessels of friendly foreign states from seizure. Initially, immunity of vessels from seizure was given only to public vessels, such as war ships. Later, this immunity was extended to include ships operated by a foreign government for commercial purpose.[ii]
In admiralty jurisdiction municipal corporations are considered part of the machinery of government. Therefore, vessels operated by the corporations are also exempted from seizure and sale.[iii] However, a merchant vessel owned by a foreign government which is in private possession cannot obtain the sovereign immunity.
For granting immunity, a declaration by a government executive body stating that the vessel is owned and controlled by the foreign sovereign is sufficient. Separate inquiry is not necessary for determining immunity.[iv] Moreover, to exempt a vessel from admiralty jurisdiction, mere constructive possession by a government is not sufficient. Actual possession should be established to obtain sovereign immunity.
[i] Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 486-487 (U.S. 1983).
[ii] Janko, 54 F. Supp. 241 (D.N.Y. 1944).
[iii] Ex parte New York, 256 U.S. 503 (U.S. 1921).
[iv] Ex parte Republic of Peru, 318 U.S. 578 (1943).