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Sovereign Immunity, Part II

A previous post provided a scenario wherein a foreign ship crashed into an American ship that was hauling cargo. The crash caused a gaping hole in the ship and the captain of the American ship ordered the entire crew to abandon ship. The American ship sank, together with all of its cargo.

A subsequent investigation revealed that the foreign ship was owned by a foreign sovereign. The investigation also revealed that the crew of the foreign ship was unhappy about their time at sea so they decided to drink, leading to the entire crew being drunk. The negligence of the foreign crew directly led to the sinking of the American ship.  

The ship owner placed a claim for maritime insurance. The insurance company may cover some or all of the damage. If there is outstanding damage, the ship owner may want to sue the sovereign for negligence, or the insurance company may want to make an indemnity suit against the sovereign. Because the ship was owned by the sovereign, the ship and its crew would be considered agents of the sovereign, so the sovereign would have responsibility.

However, there are complicated issues involved when suing sovereigns in United States Federal Court.

Foreign Sovereign Immunities Act

Under the Foreign Sovereign Immunities Act of 1976, or FISA, the law provides: “Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.”  

Under FISA, sovereigns generally have immunity from litigation in United States Courts. There are, however, exceptions to this rule. The law provides for the following scenarios where sovereign immunity would not be applicable:

  • The sovereign waives its immunity, either explicitly or implicitly;
  • Commercial activities by sovereigns that directly affecting the United States;
  • Property taken in violation of international law;
  • Rights in U.S. property acquired by succession or gift or rights in immovable property [generally real estate] situated in the United States are at issue;
  • Money damages are sought against a sovereign for personal injury, death or damage to or loss of property caused by its tortious act or omission, occurring in the United States;
  • Enforcement of an arbitration agreement made by the foreign state with or for a private party;
  • Money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking or their support, if the foreign state is a designated sponsor of terrorism; and
  • Admiralty lawsuit to enforce a maritime lien against a vessel or cargo of the foreign state, based on commercial activity.

In the above scenario, #5 would not be an issue because the collision did not occur in the territorial waters of the United States. #8 would probably be grounds for a lawsuit, provided that the American ship or insurance company placed a lien on the sovereign.

Involved in the maritime industry? Partner with a law firm that understands your business. Partner with the Kolodny law firm.

(image courtesy of David Keegan)

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