parent nodes: customary international law | federal question jurisdiction | Foreign Sovereign Immunities Act
Verlinden BV v Central Bank of Nigeria
Facts
Verlinden enters into contract to provide Nigeria w/concrete
K is governed by Dutch law, w/arbitration in Paris
Nigeria is obliged to establish a letter of credit in Amsterdam
Instead, Nigeria establishes letter of credit in New York
Nigeria then only announces it will pay for preapproved shipments (after the Dutch ships have already arrived)
V brings suit against N in SDNY under letter of credit
N claims foreign sovereign immunity under FSIA
Issue: Is there Article III jurisdiction over the suit?
The Court, per Burger, CJ, holds that it does. The federal courts have federal question jurisdiction over the suit, because FSIA requires the application of federal law to the suit, as per [Osborn v Bank of US]. The law to be applied is § 1330, which grants jurisdiction over non-immune states, and §§ 1605-1607, which set out the exceptions to a foreign state's immunity.
Even if FSIA merely sets forth federal jurisdiction over foreign states, it may count as a federal law to be applied. Congress here has exercised its power under the Foreign Commerce Clause to regulate commercial suits against a foreign state as an incident of regulating commerce with foreign nations. Further, FSIA is a substantive law in itself in so far as the grant or denial of foreign sovereign immunity can mean the end of a suit. "Congress deliberately sought to channel cases against foreign sovereigns away from the state courts and into the federal courts, thereby reducing the potential for a multiplicity of conflicting results. . ." As a result, the Article III judicial power extends to suits under the FSIA against foreign states.
See foreign sovereign immunity