Appendix — Kingdom of Greece v. Petrol Shipping Corp.

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APPENDIX A

— aewegn COURT OF APPEALS

FOR THE SECOND CIRCUIT |

No. 133—September Term, 1965.

cAqgaed November 8, 1965 Decided April 21, 1966.),

Docket No. 29935 :

In Re the Petition —

—of— |

Petron Suippine Corporation, as owner of tanker

Atiantis, Petitioner-A ppellee, - .

» for an order directing

Tue Kinapom or Grace, Ministry OF Cosrnteacd, PURCHASE”

* Drirecrorate, Respondent-Appellant, . .

to proceed to arbitration.

Before: LumBarp, Chief - Judge, FRIENDLY and Sinrn,

Circuit Judges.

Appeal from an order of the United States District

Court for the Southern District of New York, Wilfred

Feinberg, District Judge, 37 F. R. D. 437, directing re-

spondent to proceed to arbitration, United States Arbitra-

tion Act, 9 U.S.C. § 4, despite its — of sovereign im-

munity. Affirmed. '

Eu Ex.is, New York, N. Y. (Robert W. Mullen, and Hill, ,

Betts, Yamaoka, Freehill & Longcope, New York, N. Y,, on

the brief), for petitioner-appellee.

_ ARTHUR M. Brecker, New York, N. Y. (Nixon, Mudge,

Rose,.Guthrie & Alexander, New York, N. Y., on 1 the brief ),

_ for respondent- appellant.

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Smiru, Circuit Judge:

Respondent Kingdom appeals from an order of the

United States District Court for the Southern District of

_New York, Wilfred Feinberg, District Judge, directing it

to proceed to arbitration. We find no error r and affirm the

order. — .

Petrol “re ee owner of the tanker Atlantis, entered

into a written charter party with respondent dated Feb-

ruary, 12, 1960, in New York City, and agreed thereby to

transport grain acquired by respondent from the United

States government pursuant to an agreement between the

two governments. The United States was acting under the

Agricultural Trade Development and-Assistance Act of

1954, 7 U.S.C. 1691, et seq. The grain was to be shipped

from Houston, Texas, and/or Baton Rouge, Louisiana, to

Piraeus, Greece.

The shipment apparently had to be trhnsported at least

50% by U.S. flag vessels, of which Atlantis is one. See

46 U.S.C. 1241(b). The ship sustained bottom damage at

the discharge berth in Piraeus, allegedly due to an unsafe

- berth, but the charterer disclaimed responsibility. The

‘ shipowner alleged damages were about $287,000.

The charter party contained we following arbitration

clause:

Should any auiie arise between Owners and the

Charterers, the matter in dispute shall be referred to

three persons at New York, one to be appointed by |

each of the parties hereto, and the third by the two

so chosen; their decision or that of any two of them,

shall be final, and for the purpose“of enforcing any

award, this agreement may be made a-rule of the

Court. The Arbitrators shall be commercial men. '

. By letter of September 29, 1961 the shipowner named its

arbitrator, and demanded that the charterer appoint its;

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a further demand was made on December 15, 1961. _ Ad-

though spondent said that it had advised its Foreign.

Trade Administration in Washington: to proceed, no arbi-

trator was named.

On January 14, 1963 Petrol. brought this petition in the-

Tnistrict Court for the Southern District of New York, .

under § 4 of the United States Arbitration Act, 9 U.S.C.

§4. Service of process was allegedly effected by ordinary

mail to respondent’s Ministry of Trade, State Purchase

Directorate, Washington; to’ Beeker & Greenwald, de-

scribed as proctors for the Directorate; and to respon-

dent’s ministry of Commerce, Purchase Directorate, New

York City. ° ae

The charterer appeared specially, ‘and submitted a sug-

gestion of the Greek Ambassador, that as Greece ‘was a

friendly sovereign and therefore immune, the court lacked

jurisdiction. No advice from the State Department was

transmitted to the court. The District Court, Judge Daw-

son, denied the petition to compel arbitration on February

21, 1963, on the ground of sovereign immunity.

This judgment was affirmed by a panel of this court,

326 F. 2d 117 (2 Cir. 1964), with Judge Clark dissenting,

and suggesting the matter should be reversed and re-—

manded té ascertain the position of the State Department.

On rehearing en banc, 332 F. 2d 370 (2 Cir. 1964), per

curiam, the United States Department of Justice having

submitted an amicus curiae brief, the matter was remanded

for further development of facts. The case was assigned

to Judge Feinberg.

Before the District Court heard the case on remand, a

panel of this court decided Victory Transport, Inc. v.

Comisaria General de Abastecimientos y Transportes, 336

F, 2d 354 (2 Cir. 1964), cert. den. 381 U.S. 934 (1965), a

case substantially similar in its facts to the present case,

holding that a branch of the Spanish Ministry of Com-

| 4a

merce could be sued without its consent. in . that suit, and

despite its plea of: immunity.

On remand in this case, the parties. entered into a stipu- :

lation in lieu of a hearing, and introduced exhibits, includ-

-ing the Charter Party and certain documents of corre-

spondenee with the State Department. -These documents.

were a request by the Greek Ambassador to the State De-

partment for recognition of immunity and a letter from.

-counsel for petitioner to the Legal Advisor of the State

Department asking that the Department decline the Am-

bassador’s request, and citing Victory Transport; the reply

of the State Department, declining to recognize any sov-

‘ereign immunijty in the case, on the ground that the matter

was -jure gestionis, and deferring the Ambassador to the |

Tate letter; and a reply of the Legal Advisor to. counsel +

for permet — that ‘the Department had declined

to intervene.

The District Court requested an amicus suriae brief

from the United States, but the government declined, in

view of the controlling nature of Victory Transport. By

opinion of June 4, 1965, the court directed the Kingdom

to proceed to arbitration, refusing to recognize any im-

_ munity, relying on ‘Victory Transport. 37 F. R. D. 4387

(S.D.N.Y,. 1965). The Kingdom appeals.

The proper theoretical \approach to the issues in this

€ ‘case is indicated. by the brief of the United States as °

, amicus curiae in the rehearing en banc. There, at page 17,

© the brief states, |

the immunity: of sovereign: did not present a ‘‘juris-

dictional’’ defect’ such as improper service might.

Under the Suprenie Court’s analysis [in Ex Parte

Peru, 318 U.S.578 (1943)], it appears that in an ac-

— tion pantnat a sovereign just as in any cther suit, —,

jurisdiction must be acquired either by service bof

process, or by the’defendant’s. appearance in court, or

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' in’rem by. seizure and control of ‘property... Only after

such jurisdiction is acquiréd, does the sovereign im-

munity defense property [sic] come into consideration.

Instead of beme a “‘ jurisdictional’’ matter in the same

sense as acquiring jurisdiction over a person or prop-

erty, sovereign immunity’ presents a ground for re- -

linquishing the jurigletion previously acquired.

The first issues, then; deal not with immunity, but rather

with jurisdiction in personam and the adequacy of servicet

_ T, Jurispiction

- In. Farr & Co. v. Cia Intércontinental de Navigacion, 243

FY 2d 342 (2 Cir. 1957), this court held that in a suit under

the Arbitration Act, where the parties had agreed to arbi-

- trate and that ‘‘this submission may be made a rule of court

_ by either party, “ by agreeing to arbitrate in New York a

party ‘‘makes himself as amenable to suit as if he were

physically present in New York.’’ 243 F. 2d at.347. Farr

was followed in Orion S. & T: Co. v. Eastern States Petro.

Corp. of Panama, ‘284 F. 2d 419 (2 Cir. 1960), where the

contract read,‘‘‘for the purpose of enforcing awards this”

agreement shall be made a. Rule of of. [sic] Court.’’ Al-

though the suit was.to compel arbitration, not to enforce

an award, the court concluded that.as in Farr the parties

were as if physically present. We conclude that this states

a rule of federal law, under the “Arbitration: Act.

Here the contract reads, ‘‘for the purpose of enforcing’ sep

, any award, this agreement: may be made a rule of the

Court.’’ This is not appreciably different from the Orion

contract, and as was said in Victory Transport, ‘‘the fine

distinction’’ between a submission to enforce an award and

a general submission ‘‘did: not trouble.this court in Orion

. . . Implicit in the agreement to arbitrate is consent to _

enforcement of that agreement.’’ 336 F. 2d at 363, 4.

The fact that one party is.a branch of a foreign sover-

eign does not affect the conclusion that by entering into an

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arbitration agreement containing a submission such as

here, the sovereign becomes amenable to suit. The question

of immunity does not bear on the question of amenability,

_or personal jurisdiction. What Farr and Orion compel is

* that the Kingdom be treated as if it is physically present.

Moreover, the branch of respondent being sued is actu-

' ally present. ‘The Purchase Directorate maintains an office

* in New York, the one served; and it negotiated the charter

party ‘in New York, perhaps at that same office. Thus no

doctrine of constructive presence by consent is necessary.

TL Smxvice ea eS 4

Sagardless, however, of what theory meas the Parthast’

“Directorate present, service must be adequate. Here Farr

again arguably controls. Farr may be read as meaning

that an arbitration agreement such as construed there gives

consent to § service by any method designed to give adequate

notice, as' well ‘as consent to personal jurisdiction, all as a

matter of federal law. In fact, however, Farr says that ap-

_ plicable New York law is that consent to” jurisdiction in-

cludes consent to service by any method consistent with

due process. | é ‘

_ Farr was a suit against ’ a . foreign corporation. Once it

' was held that Service was adequate under New York, law,

that service sufficed in federal court by virtue of Rule 4

(a (7), Federal Rules of Civil Procedure. But that pro-

_ vision applies only: ‘to parties described in Rule 4(d)(1) or’

(3), and in our view respondent. is not one of them.

Tt is; of course, not an individual, ‘and Rule 4(d)(1) is

- inapplicable. . Rule 4(d) (3) is not-a catch-all for categories

‘of parties not otherwise considered in Rule 4. The only

entity covered in 4(d)(3) that is remotely like respondent

is ‘other unincorporated assoication which is subject to

suit under,a common name.’’ Beyond a doubt,.if the Pur-

chase Directorate is subject to suit, it may be sued under

a common name, because a right under the Arbitration Act

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Ta

is Sugely ‘‘a substantive right existing under the . . . laws

of the United States.’’ Rule 17(b) ; see United Mine Work-

ers v. Coronado Coal Co., 259 U.S. 344 (1922). The only

question, then, is whether respondent is an association.

An association ought not to be defined to include an

entity which lacks membership; respondent is essentially -.

merely an agency of the Greek government. Neither Rule

4(d)(3), nor any other part of Rule 4, provides for service ©

on such a party. And even if respondent were within Rule

4(d) (3), so that service according to state practice sufficed,

since New York does not provide for service on respon-

- dent. in the manner used here, there would be some diffi-

culty in service.’

- But the fact that Rule 4 does not provide a method for ©

' service-on respondent does not mean that no service could

- be effective. Rule 83 permits ‘‘each district court, by.a ma-

jority of the judges thereof’’ to ‘‘make and amend rules

_ governing its practice not inconsistent with these rules.’’

'There is no general provision for service on an association

because under New York law an unincorporated association .may

not sue.or be sued in its own name, Kirkman v. Westchester

Newspapers, 261 App. Div. 181, 24 N. Y. S. 2d 860 (1st Dept.

1941), aff'd 287 N. Y. 373 (1942) ; Rosen v. Alleghany Corp., 133

F. Supp. 858, 867 (S. D. N. Y. 1955), although it may be sued

in the name of its president or treasurer, N. ¥. General Associations

Law, §13. See Commentary accompanying McKinney's N. Y.

C. P. L. R. 311, p. 499. :

Rule 4(d)(7) permits service ‘‘in the manner prescribed by

the law of the state”. . . for the service of a summons or other

like process upon any such defendant [as appears in Rule 4(d)(3)]

in an action brought in the courts of general jurisdiction of that

state.’’ For arbitration actions in New York service at the time

of this suit was governed by N. Y. C. P. A. § 1450, providing for

personal service, substituted service, or-service as the court directs,

. none of which occurred here. Contrast N. Y. C."P. L. R. 403(e),

which now governs service {n all special proceedings. Since in

our view respondent is not within Rule 4(d)(3), we do not decide

whether the power to direct proper service under § 1450 subsumed

the power to approve service later.

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The Rule goes on to say, ‘‘in all cases not provided for -

rule, the district courts may regulate their practice in any

manner not inconsistent with these rules. ”? See also 28

U.S.C. § 2071. ~

Rule 15 of the Civil Rules of the United States District

Courts: for the Southern and Eastern Districts of New

York. says:

Whenever a procedural question arises which is not

covered by the provisions of any statute of the United

States, or of the Rules of Civil Procedure, or of the

Rules. of the United States District Courts for the

Eastern and Southern Districts of New York, it shall

be determined, if possible, by the parallels or analogies

furnished by such statutes and rules. If, however, no

such parallels or. analogies exist, then the procedure

heretofore prevailing in courts of equity of the United

States shall be applied, or in default thereof, in the

diséretion of the court, the procedure which shall then

prevail in the Supreme Court or the Surrogates Court

as the case may be of the State of New York may be

applied.

And when there is no Federal Rule, and no local rule, the

court may fashion one not inconsistent with the Federal

Rules. Rule 83, supra; see In re Unitep Corp., 283 F. 2d

593 (3 Cir. 1960). There is no compelling reason why the

court must fashion the rule in advance, although the better

practice in a case such as this might be to secure an advance

ruling, approving a given method.of service. |

But if neither service under Rule 4, or under a local rule

was available here, and, for some reason, that part of Rule

&3 authorizing ad hoc rules could not be used, then the court

may fashion a rule outside the Federal Rules altogether,

although this really amounts to the same thing as the ad hoc

provisions of. Rule 83. Story v. Livingston, 38 U.S. 196

[13 Peters 359] (1839) arose during the Equity Rules, uni-

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form rules governing equity practice in the federal éourts,

like the Federal Rules today, but unlike the rules govern-

ing practice on the law side, which conformed to state prac-

tice. In Story the court observed:

We think the occasion, however, a proper one for this

court to remark, if any such rule [one abolishing

equity] has been made by the district court in Louisi-

ana, that it is in violation of those rules which the

Supreme Court of the United States has passed to

_ regulate the practice in the courts of equity of the

United States. They are as obligatory upon the courts

of the United States in Louisiana, as they are upon all:

other United States courts; and the only modifications:

or, additions which can be’ made i in them by the circuit

or district courts, are such as shall not; be inconsistent

with the rules présctibed. 38 U.S. at 201.

The court went on to say that where the rules were silent,

the lower courts should look to the = of the high :

court of chancery in England.

Similarly it was held that where state law did not indi-

eate any rule of practice on the law side to which ‘the. fed-

eral law court could conform, the court should make: its

own rule, consistent. with common law principles. Thus it

. was held that where a state had not prescribed a method

of service, so that the Conformity Act did not provide the

federal court with any method, service according to common

Jaw rules sufficed. Barrow S.S. Co. ¥. Kane, 170 U. S. 100

(1898) ; Kaufman v. Garner, 173 Fed. 550, 554 (W.D. Ky.

1909) (‘‘general principles of jurisprudence”).

In our view there is no inconsistency with the Rules in

approving service im this case by ordinary mail on the re-

spondent at its address within the state. Since Rule 4 is

silent as to respondent, there is no competing method of

service authorized by the Rules which may be said to have

heen intended to be exclusive. And the fact that service

here is in a method which the Rules do not adopt directly

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for other types of parties is not a compelling distinction;

state: rules often adopt differing modes of service, and

these are used in the federal courts through Rule 4(d)(7).?

Since ,respondent is not one of the parties dealt with in

Rule 4(d)(3), our decision in Arrowsmith v. United Press

International; 320 F. 2d 219 (2 Cir. 1963) that whether a

foreign corporation has done enough to make it present su -

that service on it under that Rule and under Rule 4(d) (7)

will give jurisdiction is to be determined in the first in-

stance by state law, is not directly in point. Moreover, we

do not equate ‘‘ presence,’’ or amenability to suit, with ser-

vice of process, as. our treatment of these two questions

here indicates, and we regard Rule 4: as speaking to service

_alone, and not both service and amenability. Since, unlike

in Arrowsmith, where ‘‘presence’’ was not treated at all in

the Rules, federal law has partly treated the question of

service, in Rule 4, it is appropriate to look to federal law

to fill in any gaps in that Rule..

In Arrowsmith it was ‘‘[ovur belief that neither the fed-

eral legislature nor the federal rule-makers have had any’

intention to displace state statutes as to the taking of juris-

diction over foreign corporations in ordinary diversity

cases ...’’ 320 F. 2d at 227. We deal here with a casus

omissus both in the Federal Rules and in New’ York law.

The absence of provision in either as to the manner of

serving a foreign government cannot reasonably be con-

sidered to manifest a policy that no in personam actions

against foreign sovereigns could ever be brought. It re-

flects rather that until the treaties and declarations of the

decade beginning-in 1948, restrictii?f?-immunity of foreign

2 We do not base our decision on the question of service on the

argument that the making of the Charter Party with the New York

Commercial -Men’s arbitration clause and the actual presence of

respondent’s Purchase Directorate amounted to a consent to service

in any manner consistent with due process. Contrast Farr & Co. —

v’ Cia Intercontinental de Navigacion, supra, where constructive

presence operated to give consent to service.

Ss)

lla

governments to public or sovereign acts, see Victory Trans-

port, Inc., supra, 336 F. 2d at 357-8, there was no occasion

to make provision for service upon them, and that legis-

lators and rule-makers have failed to catch up in their pro-

cedural provisions with the more substantive developments

in this field of law. Moréover, in sharp contrast to diversity

actions against foreign corporations, the fashioning of pro-

visions with respect to service on foreign governments is a

task peculiarly appropriate for federal courts. Compare

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 423-7

(1964).

in the light of the above, we are not disposed to follow

_ Oster v. Dominion of Canada, 144 F. Supp. 746 (N.D.

N.Y.), aff’d 238 F. 2d 400 (2 Cir. 1956), cert. den. 353 U.S.

936 (1957),® or Purdy Co.-v. Argentina, 333 F. 2d 95 (7

Cir. 1964), cert. den. 379 U.S. 962 (1965), to the extent

they. hold that a sovereign cannot be served in federal

court. See also Berlanti Const. Co. v. Republic of Cuba:

190 F. Supp. 126 (S.D.N.Y. 1960), where personal service

in Havana, Cuba, on the Minister of the Presidency of the

Republic of Cuba, was held invalid under Rule 4(d)(7). *

This is not to say that service on the sovereign may be

effected on any representative of the sovereign. See Hel-

lenic Lines, Ltd. v. Moore, 345 F. 24 978 (D.C. Cir. 1965).

We hold only that service on the branch which is a party to .

the contract sued on is sufficient. , .

Finally, it has not been suggested, nor do we believe,

that the service.here was inconsistent with due process.

*The court in Oster relied. on Clark County, Nev. v. City of

Los Angeles, 92 F. Supp. 28 (D. Nev. 1950), for the proposition

that there is no authority for service of process in a manner other

- than is set forth in the Federal Rules. But in Clark, suit was

‘’ against a municipal corporation, a category of defendant service

on which is covered by the Rules. Rule 4(d)(6). That method,

of course, is exclusive ; but the ease is not authority for the holding

in Oster, since the Rules are silent as to the category of defendant -

there. : ,

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- TD. Tuemuniry

On the question of sovereign immunity this case is identi-.

- eal to Victory Transport, Inc., supra, p. 1668. There this

court held that the claim of sovereign immunity would be

denied when made by a branch of the Spanish Ministry of

Commerce which entered into a voyage charter containing

the same arbitration clause as here, for the transport of

wheat purehased under the Agricultural: Trade Develop-

ment and Assistance Act, as here. Suit’ was to compel

-arbitration.

@

- Moreover, although i in Victory Transport, Ine. ‘there had

hee no advice from the State Department to the court,

here there is in evidence the letter-from the Department to

' the Kingdom’s representative, rejecting the claim of sover-

eign immunity, on the ground that ‘‘the acts on which the

suit is brought are private acts (jure gestionis),’’ and. ap-

‘ pending the Tate letter ne the restrictive theory of

sovereignty.

‘Affirmed.

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UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT:

At a Stated Term of the United States Court of Appeals,

in.and for the Second Circuit, held at the United States

Courthouse in the City of New York, on the twenty-first |

day of April, onethousand nine hundred and sixty-six.

Present: Hon. J. Epwarp Lumparp, Chief Judge, Hon.

Henry J. Frrenpiy, Hon. J. Josepu Smita, Circuit Judges.

In Re the Petition of

Petro. SHIppina CorPoRATION, as owner of TANKER

. . AtLANtIs, Petitioner-A ppeéllee, |

Vv.

- Tue Kinepom or Greece, Ministry or CoMMERCE PurcHasE

; ? rs

Directorate, Respondent-A ppellant,

Appeal from the United States District Court for the

Southern District of New York. J

This cause came on to be heard on the transcript of

record from the United States District Court for the South-

__ ern District of New York, and was argued by counsol.

‘On Consweration Wuerror, it is now hereby ordered, .

adjudged, and decreed that the order of said District Court

be and it hereby is affirmed with costs to the appellee.

A. Dante, Fusaro

; i Clerk

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APPENDIX B

UNITED STATES DISTRICT COURT .

SOUTHERN DISTRICT OF NEW YORK

[Same Tirie]

Fernsere, D. J.

. This ease is before the court after remand from the

Court of Appeals for the Second Circuit. Petitioner Petrol

Shipping Corporation, owner of the tanker ‘‘Atlantis,’’

seeks an order compelling respondent, the Kingdom of

_ Greece, Ministry of Commerce, Purchase. Directorate, to

-proceed to arbitration. Petitioner and respondent were

parties to a charter party, dated February 12, 1960, by

which the tanker ‘‘ Atlantis’’ was chartered for the carriage

of a cargo of grain from American ports to Piraeus, Greece.

The charter patty contained an aribtration clause. The

cargo to be carried was a cargo of bulk grain sold by the

- United States to the Kingdom of Greece, under an agree-

ment between the United States and Greece made pursuant

to the Agricultural Trade Development and Assistance Act,

68 Stat. 454, 7 U.S.C. §§ 1691-1736, providing for the sale

of surplus agricultural commodities.

The petition is brought pursuant to section 4 of the

United States Arbitration Act, 9 U.S.C. $4. It alleges

that the ‘‘ Atlantis’’ proceeded to a berth in Piraeus desig-

nated by respondent, but that the berth was not a safe one

and, as a result, the vessel suffered damages of approxi-

mately $287,000. The petition also sets forth the arbitra-

tion clause, states that petitioner has designated its arbi-

trator and that respondent has failed to appoint its

arbitrator, although due notice of aribtration and demand

therefor has been served by petitioner. The petition was

filed in this court in January 1963, and thereafter, in a

memorandum by Judge Dawson, dated February 21, 1963,

‘va motion for an order directing the Kingdom of Greece

to proceed to arbitration was denied. The basis of denial

?

‘Lda

was that respondent asserted its sovereign aiyh m to

suit. On appeal, the order was at first affirmed by ja panel

of the court of appeals. Petrol Shipping Corp. vz’ ingdom

of Greece, 326 F. 2d 117 (2d Cir. 1964). Thereafter, a

rehearing en bane was granted, and in a per curiam de-

cision dated May 25, 1964, after consideration of a brief

filed by the United States as amicus curiae, the court of

appeals vacated the judgment of the district court dismiss

ing the petition and remanded the case ‘‘with instructions |

to take such evidence as is relevant to the contentions of

the parties and to make a further determination in the light

thereof and the arguments made thereon by the parties

and, if the District Court deems desirable, by the United

States.” 332 F. 2d 370 (2d Cir. 1964). On August 12,

1964, following the death of Judge Dawson, the matter was.

ordered to be heard in this court on October 5, 1964.

On September 9, 1964, ‘the court of appeals issued: its

opinion in Victory Transport, Ine. v. Comisaria General,

336 F. 2d 354 (2d Cir. 1964), cert. denied, 33 U.S.L. Week

3383 (U.S. June 1, 1965). In that case, which is remark-

ably similar on its facts to this case, the court affirmed an

order compelling arbitration between the owner-of a ship

and a branch of the Spanish Ministry of Commerce. Peti-

tioner there claimed hull damage in discharging cargo in

an allegedly unsafe Spanish port, which had been desig-

nated as a safe port. The arbitration-clause was identical ©

to the arbitration clause involved in this case. In that

ease, the court held, among other things, that it would fol-

low the distinction recognized by the State Department.

between a soveréign’s private and public acts and that the

chartering by respondent of a ship to transport a purchase

of wheat partook ‘‘far more of the character of a private

commercial act than a public or political act.’ 336 F. 2d

at 360. Accordingly, the court denied the claim of sov-

ereign immunity. The court also held that by agreeing

to arbitrate in New York, respondent in that case consented

16a,

to the jurisdiction of the court that could compel the arbi-.

tration proceeding in New York.

In September 1964, respondent in this case seis an *-

adjournment of the scheduled October hearing on remand

to allow the Greek. government to make a formal applica-

tion to the United States Department’ of State presenting

a claim of fordign sovereign immunity. . The- adjournment

‘ was granted and the application was made. The Secretary

of State denied the plea for sovereign immunity. There-

_after, in lieu of a formal hearing before this court, the

parties; on October 29,1964, entered into a stipulation as*

‘to certain facts: and exhibits, with the understanding that

the court would then rule upon the renewed motion of peti-

tioner for an order directing respondent to proceed to

arbitration. Following the suggestion appearing in the

circuit court opinion dated May 25, 1964, the court invited

the United States to submit an amicus brief containing any

~ suggestions or comments which the United States felt might

be appropriate with respect to the record or the conten-

tions of the parties. By letter dated. November 18, 1964,

from John W. Dougias, Assistant Attorney General, Civil -

Division, Department of Justice, the United States declined

the invitation. In its letter, the. government referred to

the Victory Transport decision, supra, which it character-

ized as involving ‘‘cireumstances that appear to be identical

to those of the present case.’’ In late November, final

briefs were filed with this court by the parties. On Ban-

uary 7, 1965, a petition for a writ of certiorari to the United

States Court of Appeals for the Second Circuit was filed

in the Victory Transport case by the same law firm that ”

represents the Greek government here. On June 1, 1965,

the petition wage denied. 33 U. S. L. Weex 3383.

In its brief here, the Greek government agrees that the

Victory Transport decision is similar to the insta t case.

Although it urges that the decision there was erroneous, it

_ recognizes that this court is bound by the decision in that

case and urges only two further points for consideration:

1a

(1) The purported service of process on respondent was

invalid and its invalidity cannot be cured ; and (2) there

has been no consent to the jurisdiction of the district court. -

With regard to the service of procéss, the court ‘of ap-

peals in Victory Transport stated the following (336 F. 2d

at 364): aaa i

The appellant has also challenged the propriety of

the extraterritorial service employed here. But since

the appellant [h]as consented beforehand to the. juris-

diction of the district court, the sole function of process

in this case was, as Judge Murphy correctly noted be-

low, to notify the appellant that proceedings had com-

menced. This function was certainly performed. More- —

over, similar service of process on nongovernmental

foreign corporations was held sufficient in the Farr

and Orion cases, supra. No rule of international law 2

‘requires special treatment for serving branches ’ of

foreign sovereigns. .. . :

In this case, as in Victory Transport, respondent has con-

sented beforehand to the jurisdiction of the district court,

and the notice function of process has been performed.

On. the issue of consent, respondent contends: that. under

Greek law the representatives of the Purchase Directorate

of the Ministry of Commerce who signed the charter party

lacked authority to agree. to arbitration. This point is

raised for the first tithe in.respondent’s memorandum sub- °

mitted after the parties had formally stipulated the facts_

and exhibits.*’ The Greek law relied upon is set out in the

memorandum prepared by .counsel presumably not expert -

in Greek law; ded to the memorandum are English

and Greek versions of the assertedly relevant foreign legal

materials. No other proof has been offered in the form of

affidavits or otherwise, except an affidavit stating that ‘the

. . >? . x ..

’? The memoranda were filed pursuant to instructions by the court.

Transcript of conference on October 29, 1964, p. .6.

rd

; : 18a. aA '

translation of the Greek Code into English is accurate. In-

- deed, it is respondent’s position that*‘‘this Court may and

should, take ~~ notice of the een provisions of

Greek law... .’”

_ For purposes of ‘this ery I will assume, without

deciding, that the issue of authority to agree to arbitrate

is for the court® on a, motion to compel.arbitration under

9 U.S.C. § 4.4 Respordent cites Rule 4511(b) of the N. Y.

CPLR as applicable — Feo. R. Civ. P. 43(a).5 This

rule provides :

» » Every court may ‘eine judicial notice without request

of... the laws of foreign countries. ... Judicial notice

' shail be taken ;. . if a party requeste it, furnishes the

court sufficient intorenations to enable it to comply with

the request, and. has given-each adverse party notice

of his intention to request it. Notice shall be given in

the pleadings or prior to the presentation of any evi- |

dente at the trial, but the court may require or permit

other notice. ..

Obviously, on: the basis of the papers hefore me, this is not -

"a ease in which the-court ‘‘shall’’ take judicial notice upon

request. We are here concerned with the internal powers --

of a foreign government, and the applicable language and’

- legal code is.Greek (literally and figuratively). The pau-

city of proof supplied to the court has already been de-

2 Memorandum for the Kingdom of Greece; p. 9 nl. © +

8See Moseley v. Electronic Missile Facilities, 374 U.S. 167 (1963) ;

American Airlines, Inc. v. Louisville & Jefferson County Air: Board,

269 F.2d 811 (6th Cir. 1959) ; Robert Lawrence Co. v. Devonshire ©

Fabrics, Ine., 271 F. 2d 402 (2d Cir. 1959), cert granted, 362 U.S.

909, cert. dismissed by stipulation, 364 U.S. 801 (1960). I do not

. intend by this statement to preclude an ‘arbitrator from considering -

this issue.

* The statute requires the court to order arbitration upon’ being’

satisfied that the making of the agreement. . , is not an issue.’’

is That the Federal Rules of Civil Procedure apply to procged-

ings under Title 9, U.S. C., see Fen. R. Civ. P. 81(a) (3).

an.

%

19a

_ scribed. Under these circumstances, it cannot be seriously

contended that counsel has furnished ‘‘the court sufficient

information to comply with-the request.’”6

Neither do I choose to take judicial notice of the Greek

law as a matter of discretion. The difficulties of language, —

“the insubstantial assistance provided by respondent’s coun-

sel, and the court’s unfamiliarity with the legal system in-

volved alone persuadé me not to exercise my discretion as

respondent. requests. Moreover, there are indications that

under the circumstance’ an opposite choice would be error. -

Walton v. Arabian-American Oil Co., 233 F. 2d: 541, 544

(2d Cir:), cert. denied, 352 U.S. 872 (1956). Cf. Wall Street °

Traders, Inc. v. Sociedad Espanola de Construction,. 236

F’. Supp. 358 (S.D. N.Y. 1963) ; Telesphore Couture v. Wat-

kins, 162 F. Supp..727 (E.D. N.Y. 1958). Additionally, dur-

ing the course of these: protracted judicial and diplomatic

proceedings, respondent had ample opportunity to present

its foreign law contention and the evidence to, back it up.

It has. chosen to hold back from the traditional route of

proving the applicable -Greek law as a matter of fact.?

Failure to do’ so under these -cireumstances likewise mili-

tates against a discretionary exercise of judicial ndtice. .

Since I will not take’ judicial notice of Greek law,® and

there is no evidence in the record on which to base a find- _

® The question of notice to the other party of reliance oy foreign, -

law raised by Rule 4511(b) need not be decided.

‘ Although there is no motion before me to reopen the proceed-

ings to take testimony on the issue. of Greek law, I take this oppor- °

tunity to indicate that I would not be disposed to granting such a:

request. Perhaps the arbitrator will consider this. point.

° A further argument might be based on- the recognition that the

Arbitration Act is not an independent basis of jurisdiction.

-Another traditional basis of federal jurisdiction is needed—in this

case, maritime, This raises the question whether, in an admiralty

case, internal rules of foreign law can be judicially noticed. See

Black Diamend S.S. Corp. v. Robert Stewart & Sons, Ltd., 336

U.S. 386, 396 (1949) ; Bournias v. Atlantic Maritime, Co., 220 F.

2d 152, 157 (2d Cir. 1955).

F

20a ° |

ing of lack of authority, this contention fails. Accordingly,

petitioner’s motion is granted. So ordered. ;

Dated: New York, N. Y. .

_ June 4, 1965 |

- APPENDIX C 4d

UNITED STATES COURT OF APPEALS —

FOR THE SECOND CIRCUIT

No. 119—September Term, 1963

(Argued October 30, 1963 Decided January 7, 1964.)

_ Rehearing In Banc Granted

(March 12, 1964—Deeided May 25, 1964.)

| [332 F, 2d 370]

PETITION OF PETROL Surprtna Corporation, |

: Petitioner-A ppellant,

v.

-Tue Kincpom or Greece, Ministry or. COMMERCE, ~

Purcuase Directorate, Appellee.

Befere Lumsarp, Chief J udge, and Swan, WATERMAN,

Moors, Frrenpty, Smiru, Kaurman, Hays and MarsHat.,

Circuit Judges. , ;

Per CurIAM.

Upon consideration of | the brief filed by the United

‘ States as amicus curiae on the rehearing in bane at the

request of the Court and the additional briefs of the par-

ties, the Court considers further development of the facts

to be desirable before disposition of the important issues

: 21a

of law that have- been raised. To that end, we alter the

* decision of the panel, 326 F. 2d 117 (2 Civ. 1964), vacate ©

the judgment of the District Court dismissing the petition,

and remand the case to the District Court with instructions

to take such evidence as is relevant to the contentions of

the parties and to make a further determination in the light @

thereof and the arguments made thereon by the parties °

and, if the District Court deems desirable; by the United

States. The costs of this appeal will abide the ultimate

determination. .

Swan, Circuit Judge, did not participate in this decision.

MarsHat., Cireuit Judge, |

I dissent and would adhere to the decision of the panel. ~

Decision of the Panel

(January 7, 1964)

(326 F. 2d 117]

Before Swan, CrarK and MarsHat, Circuit Judges.

.

————,_, ,

Per Curt: | ; ees eel eases 2

Respondent chartered the petitioner’s tanker Atlantis to

carry grain from Texas to Greece.’ At Piraeus, Greece, .

the Respondent designated a berth at which the Atlantis

could not safely lie afloat and sustained damage for which

the Respondent disclaimed responsibility. The charter .

party contained an arbitration clause. Petitioner appointed

an arbitrator and, in reliance on § 4 of the Arbitration Act,

9 U.S.C.A., moved in the court below for an order directing

_

‘The grain was purchased under an agreement between the.

United States and Greece made pursuant to the Agricultural Trade .

Development and Assistance Act, 7 U.S.C. A. § 1691 et seq.

22a

Respondent to appoint one. The Greek Ambassador to

the United States, appearing specially, suggested want of —

jurisdiction to sue a sovereign state without its consent.

Judge Dawson so held. .The petitioner has appealed. It

contends that the court. erred in accepting the unsupported

suggestion. of the Greek Ambassador and should have re-

quired the Respondent to establish its right to. immunity

‘through channels of our State Department.

The narrow. issue presented by the appeal is one which

was settled for this court in Puente v. Spanish National ,

State, 2 Cir., 116-F. 2d 43, cert. den. 314 U.S. 627. There

“the plaintiff sued for legal fees. _No appearance was en-

tered for defendant, but the Spanish Ambassador to the

United States submitted to the Clerk of the District Court

a letter which stated ‘‘that under prevailing principles of

international law the Spanish Government as a Sovereign

State is not subject to suit in your Court without its con-

sent, which in this case it declines to accord.’’ ‘In a well-

reasoned and lucid opinion (in which Judge L. Hand and

Judge Chase concurred) Judge Clark stated that the ques- .

tion for decision is ‘‘how the conceded immunity of a>

friendly’ foreign state from suit without its consent is to .

be presented to a court.’’ ,The Ambassador’s letter was

held sufficient. The opinion points out the distinction be- .

‘tween cases where this is true and those where a foreign

sovereign lays claim to a“vessel over which the District

Court has already acquired jurisdiction. In the latter type -

of case, of which Ex parte Muir, 254 U.S. 522 is an illu-

_ stration, the foreign sovereign must establish through | |

channels ‘of our State Department its right to immunity.

The Supreme C Court has never, so far as we are advised,

limited in any way. the Puente decision. ©

The judgment i is affirmed.

2It should be noted that the arbitration clause provided thet

‘for the purpose of enforcing any. award, this agreement. may be

made a rule of the Court.’’ Petitioner’s suit sought an order

pine ae of an arbitrator, not an order enforcing an

_ award.

are 23a

CLARK, Circuit Judge (dissenting) $

In Puente v. Spanish Nat. States, 2 Cir., 116.F, 2d 43, 45,.

cert. denied 314 U.S. 627, a case where, as we said, ‘*there

is no vestige of apparent jurisdiction,’? we stated this im-

portant limitation on the defense of sovereign immunity:

‘‘When a court appears to have all the elements of jurisdic-

tion: of ‘an action, it is not improper to require of even a

sovereign who would oust:it of that jurisdiction that he fur- ,

nish due proof to support his claim,’’? While our illustra- —

tive examples naturally concerned cases we had had, to, wit,

foreign vessels within the district court’s jurisdiction, we. -

expressly declined to limit the rule to particular instances,

and indeed in contemporary cases we recognized the con-

trolling importance of State Department pronouncements —

as to immunity claims. See, e.g. Sullivan v. State of ‘Sao °

Paulo, 2 Cir., 122 F. 2d 355; United States ex rel. D’Esquiva

v. Uhl, 2 Cir., 137 F. 2d 903, 906-907; see also Republic of .

Mexico v. Hoffman, 324 U.S. 30, 38: “We can only‘eonélude

that it is the national policy not to extend the immunity

_ In the manner now suggested, and that it is the duty of the

sourts, in a matter so intimately associated with our foreign

policy and which may profoundly affect it, not to enlarge

an immunity to an extent which the government, although

often asked has not seen fit to recognize.’’

But it is most.important to note that in later authorities

not mentioned below or here, the law to which these cases. .

_ pointed has been explicitly stated and the defense of sover-

eign. immunity definitely restriced in cases involving the

_ commercial activities of a foreign state.? In the ‘iow well

1 The Puente case—urlike the ‘Syllivan case—has never been

cited in the Supreme Court and very rarely (almost never in

recent years) in lower federal courts, undoubtedly ‘because the

_ later events recounted in the text showed it a less extensive prece-

dent than as here cited. _

*For discussion of this trend see, e.g., Timberg, Expropriation

Measures and State Trading, 1961 Proc. Am. Soe. Int. L. 113, 118.

24a

known and important ‘Tate letter’’ of May 19, 1952, on be- "

half of the Secretary of State to the Attorney. General, by _ .

Professor Jack B. Tate, then Acting Légal Adciser to the

Secretary, the ‘Department expressly clarified its positiori

and in a reasoned exposition citing precedents set forth its

future poliey ‘‘to follow the restrictive theory of sovereign ©

immiunity’’—applicable to @ sovereign. engaged ‘‘in comer-

cial activities’’—and to limit the claim of immunity accord-

ingly. 26 Dept. State Bull. 984 (1952). This was followed in

National City Bank of New York v. Republic of China, 348 -

U.S.\ 356, 361, in saying that ‘‘[r]ecently the State Depart-

‘ment has pronounced broadly against recognizing sovereign

immiinity for the commercial operations of a foreign gov-

ernment,’’ With citation to the Tate letter. And since that, |

time (1952) it appears to have been common practice to’

seek or await State Department advice before a grant of

this and other forms of immunity is made. Among illustra-

tive cases we may cite Bernstein v. N. V. Nederlandsche-

Amerikaansche Stoomvaart-Maatschappij, 2 Cir., 210 F. 2d

375, where we reversed a previous ruling when informed

of a State Department release to the contrary; and Banco

Nacional de Cuba v.. Sabbatino, 2 Cir., 307 F. 2d 845, 855- .

858, eert. granted 372 U.S. 905, containing a full discusison,

/ with extensive citations, of the role of the State Department .

in civil litigation in the federal courts. See also Rich v.

Naviera Vacuba, S. A., 4 Cir., 295 F. 2d 24. °

Here the district court, in granting immunity, without any

advice whatever from the-State Department, in a case in- —

volving a grain sale to, and an agreement to arbitrate by,

the Kingdom of Greece, thus accorded that Kingdom a spe-

cial‘ privilege, contrary to the. principles stated above. Be-

fore taking such a course the district judge should have

asked the respondént to advise him as to the State Depart:

- ment’s position with reference to its claim of immunity or -

should himself have directed an inquiry to the Secretary

. of State. There was particular reason to do so here, as this

concerned not the enforcement of a final decree, but merely

ok A ten re Ne ow

o

25

_ .

. the preliminary step of : requiring the iat! to sides |

an arbitrator, as it had agreed in its contract/to do. See

for such an order against a foreign corporatiag ynder simi-

lar ¢ircumstances, Farr ¢ Co. v. Cia. Intercontinental De .

Navegacion De Cuba, 8..A., 2 Cir., 243 F. 2d 342. The cir-

cumstances of consent to the arbitration of what appears

. Clearly to be a commercial. transaction. suggest a good pos-

sibility that the Department which has the responsibility

(as we do not) for costrol of our foreign relations will not

support the defense of immunity here. As it stands, the dis- °°

trict court has assumed ‘to interfere most discriminatonily ;

in delicate foreign relations not entrusted to its _responsi-

bility, and a majority of the court now supports the inter-

ference: Had this ever been the law and common practice,

it is ‘surely not so now. I would reverse and remand for

ascertainment of the State Department’s position as to this

immunity claim. .

UNITED STATES DISTRICT COURT:

SOUTHERN DISTRICT OF NEW YORK

Memorandum Decision and Order of- the

Honorable Archie O. Dawson

Matrer oF THE PeEtTiTION oF PETROL

SHIPPING CorPoraTIoNn

63 Civ. 14>. (

This is a petition by Petrol Shipping Corporation, owner

of the Tanker Atlantis, for an order directing the King-

dom of Greece to proceed to arbitration. Petro Shipping +

Corporation and the Kingdom of Greece were parties to a

contract by which the Tanker Atlantis was chartered for .

the carriage of a cargo of grain from Houston, Texas’ to: .

Greece. The charter party contained an arbitration clause. .

The cargo to be carried was apparently a cargo of bulk. :

grain: ‘which was sold by the United States to the Kingdom »

tid

i 26a

of Greece winder Title I of Public Law 480 providing for

the sale of surplus agricultural commodities.

‘The ‘Greek Ambassador to she United States has filed

on this motion a suggestion of lack of jurisdiction by reason’

of sovereign immunity asserting that the Kingdom | of

Greece asserts its sovereign immunity to suit i in this action. :

That Greece isa sovereignty and a nation ‘friendly to

the United States is a matter of which this Court may take |

judicial notice. No dispute has been raised as to the author-

ity of the Greek Ambassador to file this suggestion of sov-

ereign immunity.

Since the motion seeks to compel on order directing a’

q sovereign state to take certain action, and since the recog-

_ nized Ambassador of that state has raised the question of

sovereign immunity, this Court must ab initio ‘consider .

‘whether it has any: authority to take the action sought. ‘The

law is clear that a foreign sovereign is immune from suit

in courts of the United States unless it gives its consent to

such suit.. Guarantee Trust Co. of N. Y. v. United States,

304 U.S. 129, at. p. 134; Principality of Monaco v. Missis-

sippi, 292 US. 313 (1934). An order of this éourt, direct-

ing the Kingdom of Greece to proceed to arbitration, can-

not be entered. against such sovereign state unless it waives -

its immunity to the action. .

There ifan indication in the ainorsndusi submitted in

support of the motion that the Government of Greece, by a.

letter dated January 3, 1962, had authorized their Foreign -

Trade Administrator in Washington, D. ‘C. to nominate an

- arbitrator for this arbitration. If thig is 80, it is. the volun-

tary act of the Kingdom of Greece and it is'to be hoped. that -

arbitration may proceed i in this voluntary. manner. If the

Government of Greece is ready to proceed with the arbitra-

‘ tion there is no occasion for this Court to direct them to

arbitrate.’ If-it is not ready to proceed to arbitration, but

A ”, prefers’ to = on ‘its sovereign inicaniiy, thefe is no —

diction i in this Court to compel it to’ act.

‘The motion. is denied.

So ordered.

oe : _ Arcus 0. Dawso,

U.S. D. i

Dated: New York, N. Y.

February 21, 1963,

P {-

.

>

S Office-Supreme Court, -U.S,

Leary - FILED ~

BUMREN ES COURT. Us Be SEP.13 1966.

JOHN F. DAVIS, CLERK

. IN THE eee : ;

Supreme Court of the United States t

October Term, 1966 4

No. 4.8

KINGDOM OF Greece, Ministry or CoMMERCE,

PURCHASE DimecToraTE,

Petitioner

Vv.

Perrot Surpprnc CoRPoRATION,

| Respondent

; fe) 5 ;

BRIEF FOR RESPONDENT IN OPPOSITION

TO PETITION FOR CERTIORARI

. a Eur E111,

, ‘No. 26 Broadway

New York, N. Y. 10004

Counsel for Respondent

OFC Counsel:

Rosert W. ‘Moues, ;

INDEX

Page

IS) 2 oer ee ee a a ee oe 1

Pe FER AOC Ce A Dee ee IER RED ee

Point I— The charterer has no cognizable sovereign

immunity with respect to the within commercial ©

ee ee alike Cas nan Dene aae 6

Point iI — The Court below properly found jurisdic-

tion was created by the agreement to arbitrate and

it did not depend upon service. Service as such was

required merely for the purpose of notice and that

- function was performed ......................... S

Point III — Even if the rationale of the Court below

were otherwise, objections to process have been long

GUROO WHEVOE 20. icc cect s cece pe scseesoteuss 9

Conclusion ........ Coan eevepes tts aaa oot, re

_ —ApPEnpix

CITATIONS

Page

CasEs:

P. Beiersdorf & Co. v. Duke Laboratories, Inc., 10

eo 8 Fo ee ern) fae ee 11

Braiser v. United States, 229 F. 2d 176 10th Cir. (1956)

GONG, GOMNE Te I GND oa nc fediccviccvcuetssn 13

Emerson v. National Cylinder Gas Co., 131 F. Supp.

299 (D.C. Mass. 1955) ........ LEG ICD, SEPT Se —

_ National Rental v. Szukhent, 375 U.S. 311 (1964) ae 14

Puente v. Spanish National State, 116 F. 2d 43 (2nd

Cir. 1940) cert. denied, 314 U.S. 627 ............... 4

Victory Transport, Inc. v. Comisaria General, 232 F.

Supp. 294, aff’d, 336 F. 2d 354 (2d Cir. 1964), cert.

Ge, MD I ND cov vied sersiscees .-5, 7, 8, 9, 10

cree eran cay

- Index Continued

ee Page

Rutzs: :

Federal Rules of Civil siacadiia

Sk BER ee ee ees re ere 8

Rule ee rire ee RR yy er eee 10 :

Rule™12(h) sleek oP oat ol

MISCELLANEOUS: | ‘eis poe - | .

Moore’ S s Federal io Peaetien, 24K. Pp. “2327 aS Per ie i

© : a

a

3

i

.

IN THE

Supreme Court of the United States

ce October Term, 1966 |

- No.

' Kinepom or Greece, Ministry oF CoMMERCE, :

| PuRCHASE Directorate, |

@

Petitioner

9

*.

Perrot Surprine Corporation,

mm A

BRIEF FOR RESPONDENT IN OPPOSITION,

' TO PETITION FOR A WRIT OF CERTIORARI

Statement

The petitioner, the Ministry: of Commerce, Purchase

Directorate of the Kingdom of Greece (hereinafter de-

nominated Charterer) and the respondent, Petrol Shipping

Corporation, a New York corporation (hereinafter denomi-

' nated Shipowner) entered into a written voyage-charter in

the City of New York for the carriage .of a cargo of grain

by the U.S. Flag Tanker Aruantis from Houston, Texas

and/or Baton Rouge, Louisiana, to Piraeus, Greece. The

grain to be carried by the vessel was purchased by the

Charterer from the United States under the credit provi-

sions of Public Law 480-and so was required to be carried ;

_ ina United States Flag vessel.

The charter party, which Charterer admits is subject to

the Rules and Regulations of the United States Department

of Agriculture, contained the following standard arbitra-

Respondent

fbszaainian

9 ‘

| tion clause (Petitioner’s. Appendix hereinafter cited as

‘*Pet.”’, “Respondent’s Appendix hereinafter cited as ~

y “Resp. ) 5 é :

| “Should any dispute arise between Owners and

the Charterers, the matter in dispute shall be re-

ferred to three persons at New York, one to be ap-

* pointed by each of the parties hereto, and the third

. by the. two so chosen; their decision or that of any .

two of them, shall be final, and for the purpose of

enforcing any award, this agreement may be made a.

rule of the Court. The Arbitrators shall be commer-

cial men”. (Pet. 2a).

In the performance of the charter the Atlantis suffered

substantial damage at the discharge berth in Piraeus for

which the Shipowner made claim against the, Charterer.on

the ground that the discharging berth was an unsafe berth.

Upon disclaimer by.the Charterer, the Shipowner notified

_ the Charterer by letter dated September 29, 1961 of its

appointment of its arbitrator, under the above clause, and .

demanded that the Charterer appoint its arbitrator so that

the dispute between the parties concerning responsibility

. ‘ for the ship’s damage could be determined by arbitration,

in accordance with the agreement (Resp. 4a).

‘The Shipowner, upon Charterer’s failure to comply

' with the foregoing demand made a further demand by |

letter dated December 15, 1961 (Resp. 5a). The Charterer

then advised that it had authorized the Greek Government

Foreign Trade Administration in Washington to proceed

forthwith (Resp. 14a).

The Charterer in spite of its notices that it would

. | proceed forthwith, neglected to name its arbitrator. Where-

upon the Shipowner, by\motion returnable January 29,

1963, petitioned the United States District Court for’ the

Southern District of New York for an order directing the

Charterer to proceed with the arbitration (Resp. 3a-5a).

At the request of the Charterer’s attorney, the parties

stipulated the adjournment of the argument of the motion

\

ees,

ed

me

to February 19, 1963. The stipulation was signed by the

attorney for the Charterer and contained no reservations —

with respect to his authority (Resp. 34a).

_ The Charterer opposed the motion, submitting in oppo-—

sition a brief affidavit entitled ‘Suggestion of Greek

Ambassador’, merely stating that the Kingdom of Greece

is a-friendly sovereign power which is not subject to suit

without its consent, which the Ambassador stated it declined —

to accord, and further asserting its sovereign immunity —

" (Resp. 10a, 11a). No assertion or claim was made respecting

, Service of the motion papers. :

_ The Charterer also submitted in opposition the affidavit

of the Director of the Office of Foregn Trade Administra-

tion, Ministry of Commerce, Kingdom of Greece, which

amounted to no more than a concession that the aforesaid

_ charter party had been entered into and that the cargo was

purchased by the Greek Government from the U.S. Depart-

ment of Agriculture under Publie Law 480, which required

50% of such cargoes to be carried in United States Flag

ships (Resp. 12a, 13a). | |

As hereinbefore stated the Charterer refused to nomi-

_ Nate its arbitrator and claimed sovereign immunity,

although it had notified the Shipowner on January 3, 1962,

after the Shipowner demanded arbitration, that it had | -

” authorized the Greek Government Foreign Trade Adminis-:

tration in- Washington, D. C., to aominate its arbitrator

(Resp. 14a). Movant Shipowner urged that this circum-

stance clearly demonstrated that the Charterer’s claim for

sovereign immunity was unfounded.

On February 21, 1963, District Judge Dawson dismissed see

the Shipowner’s petition, stating:

“Tf [the Kingdom of Greece] is not ready to proceed °

to arbitration, but prefers to rely on its sovereign

immunity, there is’ no jurisdiction in this Court to

compel it to act. The motion is ‘denied’ Pet. 26a,

274). | | : |

The Shipowner appealed the denial of its petition to a

panel of the 2nd Circuit Court of Appeals consisting of

a

a ke an eee ;

b Bot Monier ese ok,

Judges Swan, Clark and Marshall. On January 7, 1964

_ the district court was affirmed (326 F. 2d 117) on the author-

ity of Puente v. Spanish National State, 116 F. 2d 43-(2nd

Cir. 1940) cert. dented, 314 U.S. 627. The panel. was not

unanimous and it was Judge Clark, the writer of the Puente

decision, 24 years before, who dissented. Judge Clark urged |

at page 118 that the case be reversed and rerfqnded for .

ascertainment of the State Department’ 8 ‘position as to. |

the claim of sovereign immunity. |

Tlie Shipowner’s application for rehearing en Banc by’

the Circuit Court was granted. That Court upon reconsid-

eration remanded the case for the further development of

facts, particularly with regard to the position of the United

States Government (Pet. 21a). *

Upon remand the Charterer finally ‘and for the first dime

-in this proceeding made a formal. request of the State

-Department that sovereign immunity be granted to it. This

plea was made though the transaction involved was of a

manifestly commercial nature: In presenting its request the

Charterer stated in part to the State » Hepartonpat as fol-

lows: ne ;

“The assertion of “personal jurisdiction iw the

United States courts over the Kingdom of Greece is .

- eontrary to established principles of international

law governing the comity of nations’’ (Resp. 18a).

_ The request for recognition of the.Charterer’s assertion

of sovereignuimmunity, considered with care and prudence

in the national interest, was absolutely refused. The refusal

by the State Department was terse but re the ration- ©

ale of its necessity : ‘

“As the Embassy is probably aware, it is the prac-

tice of the Department of State when considering

requests for recognition of sgvereign immunity from

- suit by foreign governments to follow the policy set

". forth in its letter of May 19, 1952, to the Acting. At-

torney General, the so-called Tate letter, a copy of

which is.enclosed. Applying that policy to the facts

i

- is,

in the case under consideration, the Department sees

no basis for any conclusion other than. that the acts

on ‘which the suit is based «are private acts (jure

_ gestionis).. In these circumstances, the Department __

_ regrets that it is unable to comply with the request.of _ |

the Ambassador of the Kingdom.of Greece for rec-

ognition of. sovereign immunity from suit’ in the -

. instantcase. .

. ‘Tt follows that the other questions raised by the |

“ «Memorandum attached to the Ambassador’s note are

matters for the Court’ (Resp. 21a, 22a).

é . . ¢ :

Considering this action of the United States, through _

. the State Department, as well as the documentation and.

stipulations of counsel in the framework of authority: sup- °

plied. by Victory Transport, Inc. v. Comisaria General, 232

F. Supp.. 294, aff’d.; 336 F. 2d 354 (2d Cir. 1964), cert.

denied, 381 U. 8. 934, which involved the Spanish govern-

ment, District Judge Feinberg granted the Shipowner’s

motion to compel arbitration. The U. S. Court, of Appeals ;

' for the Second Circuit affirmed by opinion which searchingly

examined Charterer’s contentions with respect to jurisdic-

tion and sovereign immunit#. : ;

“ ™e YF

}

| / - Argument

_ The petition for a writ of certiorari should be denied for

the following reasons: . ge 3 -

1. This Court, has: already denied certiorari re-

lief in Victory Transport, Inc, v. Comisaria General,

supra, a case on all fours with the case at bar and

with facts so similar as to nearly attaina geometrical | |

congruity.

4 . The Charterer has been able to point to no ..-

substantive conflict between Circuit Court decisions

on the subject matter in this suit, nor is there any -

conflict between. the decision of the Circuit Court

‘herein and the decisions of the United States Su-

CQ

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