Act of state doctrine

(redirected from Act-of-State Doctrine)

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 ?
Sabbatino, applying the foreign act-of-state doctrine to bar a claim arising out of President Castro's expropriation of U.S.
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.
(176) 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." (177) Unlike the doctrine of sovereign immunity, however, the act-of-state doctrine is a "rule of decision." (178) It is prudential rather than jurisdictional, meaning that federal courts enjoy considerable flexibility in determining whether to defer, for reasons such as comity, to the executive branch's assessment of when application of the doctrine would advance the interests of the United States.
(184) Like the act-of-state doctrine, its applicability is without clear definition.
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)).
(29.) 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.