Act of state doctrine

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Act of state doctrine

This doctrine says that a nation is sovereign within its own borders, and its domestic actions may not be questioned in the courts of another nation.

Act of State Doctrine

A doctrine stating that each sovereign state has complete control over the laws within its own borders and that its acts cannot be questioned in the courts of another state. This is important to economics and trade because it means that investors in one country cannot sue to force a company or the government in another country to take an action favorable to them; they must go through the domestic courts for redress. While international agreements and conventions temper the act of state doctrine, it remains important.
References in periodicals archive ?
A waiver of sovereign immunity and the act-of-state doctrine, as well as choice-of-forum and -of-law clauses, almost always appears.
I will not discuss here the applicability to sovereign-debt contracts of the act-of-state doctrine articulated in Sabbatino, although in some cases it may be relevant.
Finally, the Court stressed the "narrowness" of its holding, noting that several defenses, such as the act-of-state doctrine, (85) would remain available to Austria.
One option, as the Court in Altmann explicitly mentioned, (173) is that a foreign state may still invoke a substantive defense that its actions fall under the act-of-state doctrine and, therefore, that the legality of its public domestic acts cannot be questioned in a foreign court.
Like the doctrine of sovereign immunity, the act-of-state doctrine derives "from the thoroughly sound principle that on occasion individual litigants may have to forgo decision on the merits of their claims because the involvement of the courts in such a decision might frustrate the conduct of the Nation's foreign policy.
184) Like the act-of-state doctrine, its applicability is without clear definition.
at 768 ("We conclude that where the Executive Branch, charged as it is with primary responsibility for the conduct of foreign affairs, expressly represents to the Court that application of the act-of-state doctrine would not advance the interests of American foreign policy, that doctrine should not be applied by the courts.
2d at 1359 (rejecting the view that the act-of-state doctrine has been superceded by the FSIA and noting that Congress, in enacting the FSIA, recognized the distinction between that statute and the doctrine and "found it unnecessary to address" how the FSIA affected the act-of-state doctrine) (citing H.
But see Yonover, supra note 131, at 92 (arguing that the act-of-state doctrine would not even apply in this case because the doctrine "applies only when the foreign government involved is still 'extant and recognized by' the United States at the time of the lawsuit" and, given that the Nazis annexed Austria in 1938, "a court could conclude that Austria was not the sovereign acting at the time of the taking of the property and, more importantly, the Nazi regime that looted the property no longer exists" (citation omitted)).