Case Digest: Alfred Dunhill of London, Inc. v. Cuba

 Public International Law | Act of State

Facts: 

  • Alfred Dunhill mistakenly paid funds for cigars sold to them by certain expropriated Cuban cigar businesses.
  • Cuba failed to return to Dunhill the funds mistakenly paid by Dunhill.
Issues:
  • Whether the failure of Cuba to return to Dunhill funds mistakenly paid was an “act of state” by Cuba precluding an affirmative judgment against respondents. NO
Held: 
  • The decision of the Court limited the scope of the act of state doctrine:
  • If we assume with the Court of Appeals that the Cuban Government itself had purported to exercise sovereign power to confiscate the mistaken payments belonging to three foreign creditors and to repudiate interventors’ adjudicated obligation to return those funds, we are nevertheless persuaded by the arguments of petitioner and by those of the United States that the concept of an act of state should not be extended to include the repudiation of a purely commercial obligation owed by a foreign sovereign or by one of its commercial instrumentalities. Our cases have not yet gone so far, and we decline to expand their reach to the extent necessary to affirm the Court of Appeals... Of course, sovereign immunity has not been pleaded in this case; but it is beyond cavil that part of the foreign relations law recognized by the United States is that the commercial obligations of a foreign government may be adjudicated in those courts otherwise having jurisdiction to enter such judgments. Nothing in our national policy calls on us to recognize as an act of state a repudiation by Cuba of an obligation adjudicated in our courts and arising out of the operation of a commercial business by one of its instrumentalities. ...

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