Facts of the Case
Farr, Whitlock & Co. contracted to buy sugar from a Cuban corporation. The corporation loaded the sugar on to the S.S. Hornfels, but in response to President Eisenhower reducing the Cuban sugar quota, Cuba issued a decree taking possession of the sugar. The Cuban government would only allow the sugar to leave Cuba if Farr, Whitlock entered into a new contract with Banco Nacional de Cuba, an instrumentality of the Cuban government. After the sugar left Cuba, Farr, Whitlock refused to pay Banco Nacional. Banco Nacional sued in the U.S. District Court for the Southern District of New York to recover payment. The court granted summary judgment for Far, Whitlock, holding that Cuba’s taking of the sugar violated international law. The U.S. Court of Appeals for the Second Circuit affirmed.
Questions
May the courts of the United States refuse to give effect to decrees of a foreign sovereign government where the decree violates common international law?
Conclusions
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No. In an 8-1 decision, Justice John M. Harlan wrote the majority opinion reversing the lower court. The Supreme Court held that it will not decide the validity of a decree by a foreign government absent a treaty or other agreement. It did not matter that the taking violated customary international law. The majority noted that a judicial decision on this issue without a treaty would strain U.S.-Cuba relations. Justice Byron R. White wrote a dissent, stating that he would decide the case on the merits, absent any specific objection to examining Cuba’s law under international law.
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