Banco NAcional de Cuba v. Sabbatino (To Be Emailed Later)
Banco NAcional de Cuba v. Sabbatino (To Be Emailed Later)
Banco NAcional de Cuba v. Sabbatino (To Be Emailed Later)
CONSTITUTIONAL LAW I
4YP1-A MON. 5:30-9:30 PM
Banco Nacional v. Sabatinno 376 U.S. 398 (1964)
On July 6, 1960, the Congress of the United States amended the Sugar Act of 1948 to permit a
presidentially directed reduction of the sugar quota for Cuba; the Cuban Council of Ministers then
adopted "Law No. 851," which characterized the reduction in the Cuban sugar quota as an act of
"aggression, for political purposes" on the part of the United States, justifying the taking of
countermeasures of Cuba which provided for the compulsory expropriation of all property and
enterprises, and of rights and interests arising therefrom, of certain listed companies, including C.A.V.,
wholly or principally owned by American nationals, which had been violated by an American sugar
distributor in the name of Farr, Whitlock who refused to do so.
Petitioner (Banco Nacional de Cuba), then brought an action for conversion of the bills of lading
to recover payment from the broker and to enjoin from exercising dominion over the proceeds arguing
that the Cuban nationalization was an official Act of State and should be honored by the US, but the
court nevertheless rendered summary judgment against the petitioner, ruling that the act of state
doctrine was inapplicable when the questioned act violated international law, the Court of Appeals
affirmed the decision additionally relying upon two State Department letters which it took as evidencing
willingness by the Executive Branch to a judicial testing of the validity of the expropriation.
When the case reached the highest court, the US Supreme Court reversed the decision of the
Court of Appeals, held that Cuba is not barred from access of the US Federal Courts and ruled that the
policy of the US Federal Court was to honor the Act of State Doctrine presented by the Cuban
government which states that a nation is sovereign within its own borders and its domestic actions may
not be questioned in the courts of another nation.
The act-of-state doctrine is a common-law principle that prevents U.S. courts from questioning
the validity of a foreign country's sovereign acts that take place within its own territory and says that
courts should not decide cases that would interfere with their country's foreign policy.