North American Dredgin Company Claim (1926)

Facts:
US in behalf of American Dredging Company of Texas, an American corporation, filed recovery of the
sum with damages against Government of Mexico to whom American Dredging has contracted with. In
their contract, it states that: Corporation shall be considered as Mexicans in all matters, within the
Republic of Mexico, concerning the execution of such work and the fulfilment of this contract. They shall
not claim, nor shall they have, with regard to the interests and the business connected with this contract,
any other rights or means to enforce the same than those granted by the laws of the Republic to Mexicans
A Calvo clause held to bar claimant from presenting to his Government any claim connected with the
contract in which it appeared and hence to place any such claim beyond the jurisdiction of the tribunal. It
appreciates the legitimate desire on the part of nations to deal with persons and property within their
respective jurisdictions according to their own laws and to apply remedies.
The Calvo clause is neither upheld by all outstanding international authorities and by the soundest among
international awards nor is it universally rejected
Issue:
WON a citizen or a corporation can represent his/her sovereign state internationally under the calvo
clause of its contract between foreign corporations?
Held:
The contested provision, in this case, is part of a contract and must be upheld unless it be repugnant to a
recognized rule of international law. What must be established is not that the Calvo clause is universally
accepted or universally recognized, but that there exists a generally accepted rule of international law
condemning the Calvo clause and denying to an individual the right to relinquish to any extent, large or
small, and under any circumstances or conditions, the protection of the government to which he owes
allegiance. There exists no international rule prohibiting the sovereign right of a nation to protect its
citizens abroad from being subject to any limitation whatsoever under any circumstances. The right of
protection has been limited by treaties between nations in provisions related to the Calvo clause.
A person cannot deprive the government of his nation of its undoubted right of applying international
remedies to violations of international law committed to his damage. Such government frequently has a
larger interest in maintaining the principles of international law than in recovering damage for one of its
citizens in a particular case, and manifestly such citizen cannot by contract tie in this respect the hands of
his Government
As the claimant voluntarily entered into a legal contract binding itself not to call as to this contract upon
its Government to intervene in its behalf, and as all of its claim relates to this contract, and as therefore it
cannot present its claim to its Government for interposition or espousal before this Commission, the
second ground of the notion to dismiss is sustained.