Foreign Sovereign Immunities Act (FSIA)
The Foreign Sovereign Immunities Act (FSIA) is a law which was put into operation in 1976 and codified under Title 28 of the United States Law.
The main purpose of this law was not to define which acts of sovereign states are actionable or not but to provide the conditions that should be present which would warrant a lawsuit against a foreign state. FSIA is based on the theory that all sovereign states are equals, and one sovereign state should not exercise its judicial authority over another.
The Foreign Sovereign Immunities Act has its roots on the pages of American history. The United States Judiciary has long recognized the immunity of foreign states from suits initiated in US courts. Since the case of The Schooner Exchange v. McFadden, US courts repeatedly refused to entertain and hear claims or suits against foreign governments. This is in accordance with the basic principle in International Law called State Immunity from Suit.
The United States Law has relied on the process of suggestion in order to impede suits against foreign states. The process of suggestion is a scheme whereby the foreign state attests or suggests to the Department of Foreign Affairs of the host state, that a certain juridical entity is performing an official governmental function therein. This process hinders or impedes the filing of suits against the said juridical entity making it immune from suit.
The FSIA is only applicable in cases where a party is categorized as a foreign state. The burden of proof that a state or a juridical entity falls within the purview of a foreign state as defined under the provisions of the law lies on the party invoking the same.
Under the Foreign Sovereign Immunities Act (FSIA) a foreign state, in order to be categorized as such, is defined to include the following elements:
- Foreign state
- A political subdivision of a foreign state
- An agency or instrumentality of a foreign state
Also, for an agency or an instrumentality to avail of the FSIA, the following requirements must be present:
- It must have a separate legal entity
- It is either:
- an organ of a foreign state or political subdivision or
- majority of its shares or other ownership interest is owned by a foreign state or political subdivision.
Take note that under settled jurisprudence, government agencies and government owned and controlled corporations are covered by the FSIA with the requisite that under the provisions of the FSIA, in case of the government agency, the same must be performing governmental functions, while in case of GOCC, the majority stocks of which must be owned by the government.
Exceptions to FSIA
The premier exception lies where the foreign state itself voluntarily waived the privilege of immunity from suit.
A noteworthy exception to sovereign immunity from suit is when the foreign state or government agency or GOCC is performing a commercial or proprietary function. The rationale behind this exception is that when the foreign state exercises a commercial function, it descends to the level of an ordinary individual and is therefore unclothed of the privilege of immunity from suit. Under the FSIA, these commercial acts are determined by the following:
- When the plaintiff’s claim is based on a commercial activity carried on in the U.S. by the foreign state.
- When the plaintiff’s claim is based upon an act by a foreign state which is performed in the U.S. in connection with a commercial activity outside the U.S.
- When the plaintiff’s claim is based upon a commercial act of a foreign state which is performed outside the U.S. but causes a direct effect in the U.S.
Also, other notable exceptions in the FSIA are acts of terrorism such as sabotage, torture and extra judicial killing. Note, however, that in order for the plaintiff to avail of this exception, the acts should be by way of providing material support or resources for the performance of acts of terrorism by an official of a foreign state. The same should also be done in the performance of his duties as a government officer.
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