Banco Nacional de Cuba v.

Sabbatino 376 US 398 (1964)

Facts:
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 Cubas taking of the sugar violated
international law. The U.S. Court of Appeals for the Second Circuit affirmed.

Issue:
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?
Held:
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.