^* [Reproduced from the Appendix to the Brief for the United States as Amicus Cu riae.]

¹ Since First National City Bank was decided, the Department of State lias taken the position in the sovereign immunity area that even where a counterclaim exceeds the foreign state's claim, the courts may adjudicate the counterclaim if it arises from the same “transaction or occurrence that is the subject matter of the claim of the foreign state.” S. 566, 93d Cong., 1st Sess., § 1607(1); see, ALT. Ivestatenient, Foreign delations Law of the United States, Second. §70(2)(b). Tn our view, the adjudication of counterclaims against a foreign state, arising from the same transaction, occurrence or subject matter as the, claim of the foreign state, does not pose foreign relations difficulties.

² See, e.g.. In The, Matter of Minera El Tenie/nte. S.A., 12 Int'l Legal Materials 251 (Superior Ct. Hamburg. 1073) (a foreign state's act of expropriation that violates international law will not lie recognized by German courts if the subject matter of the litigation has a substantial contract with Germany): Bra/Jen Copper Company v. Le Groupement cV Importation des Metaux, 12 Int'l Legal Materials 187 (Ct. of Extended Jurisdiction Paris, 1972) (rejecting sovereign immunity of a state trading company that marketed expropriated copper); Compactnie Francaise de Credit et de Banque v. Consorts Atard. Clunet, J. de Droit Int'l, 98 (1971). p. 86 (France: Cour d'Appel Amiens, 1970) (foreign expropriation decrees will not be recognized in France absent the payment of prompt, adequate and effective compensation) ; Credit Fourier cVAlaeriv et de Tuninie v. Xarhoxnc, Clunet. J. dtt Droit,Int'l 96 (1969). p. 912 (France: Court de Cassation, 1969) (acts of expropriation not recognized in France unless equitable compensation is first determined) : Chester Geriehtshof (Austrian Supreme Court), decision of 22 December 196.”). Osterr. Juristenzeitung 21 (1966). p. 20-1. Clunet. J. du Droit Int'l. 91 (1967), p. 911 (an expropriation without compensation violates internationallaw. bnt no recovery against purchasers of expropriated property); N.Y. Assuranfie Maatschappi} lc Nederlatulen van J8 5 v. P. T. E scorn ptobanh. 33 Int'l L. Rep. 30 (D. Ct. The Hague. 1962) (rejecting act of state defense where there is a violation of international law).

³ Banco lc Yhcaia v. Don Alfonso fie Borbon y A nutria, [1935] 1 K .R 140. 50 T.L.R. 284: Br Ilrlhcrt Waff;/ & Co. Ltd., [1956] Ch. 323. 34G: 1 Lanterpaeht, Oppenheim's International Law. 267-6S (8th ed. 1955). See also. Republic of Peru v. Peruvian Guano Co.. [1SS7] 36 Ch. D. 489 and Republic of Pern v. Dreyfus Brothers d Co. [18SS] 38 Ch. D. 348. where British courts, under international law. refused to give effect to Peruvian laws annulling acts of the preceding Peruvian government; cf. Buttcs Gas and Oil Co. v. Hammer [1075] 2 W.L.R. 425 at 434-35.

^1/ Unless otherwise noted, the facts as stated herein are not contradicted by any of the briefs filed in the case.

^2/ The Brief for the United States as Amicus Curiae Tthereafter cited as Br. U.S.] describes “intervention” as a procedure whereby “the interventor is vested with complete possession and control of a business enterprise tothe exclusion of the officers, directors, shareholders, partners or other persons who would otherwise manage and conduct it, although no “formal transfer of title” is affected. Intervention resulted in the elimination of the rights of Dunhill and the other pre-intervention owners to the receipts and profits of the business. Br. U.S. at 2-3 n.l. The Brief for Respondents on Reargument, October 1, 1975 [hereinafter cited as Br. Resp. Re.] describes intervention as “a device, utilized not only in Cuba but in most Latin American countries, by which a government receiver is appointed to take over, for a temporary period, industrial or commercial business which for some reason or other cannot continue to function … The tobacco companies were intervened in 1960 and were not nationalized for some time thereafter. Thus, intervention is an intermediate stage, at which no decision has been made as to the ultimate disposition of the enterprise.” Br. Resp. Re. at 2-3 n.l. The terms “intervention” and “nationalization” are used interchangeably in this summary, as they are in the briefs themselves.

^3/ Cuban legislative and executive documents authorizing the Tntervention are attached as an Appendix to Br. Resp. Re.

^4/ Palicio v. Brush and Bloch, 256 F.Supp. 481 (S.D.N.Y. 1966), aff'd, 375 F.2d 1011 (2d Civ. 1967), cert, den., 389 U.S. 830 (1967).

^5/ See, e.g., Brief for the Petitioner [hereinafter cited as Br. Pet.] at 4.

^6/ Brief for Respondents [hereinafter cited as Br. Resp.], August 29, 1974 at 12.

^7/ Menendez v. Faber, Coe & Gregg, Inc., 345 F.Supp. 527 (1972).

^8/ 485 F.2d 1355 (1973).

^9/ 416 U.S. 981 (1974).

^10/ Not summarized here is a brief by the Bank of Boston International (BBI) as Amicus Curiae. This brief describes a separate action, Bank of Boston International v. Banco Nacional de Cuba, 61 Civ. 2116 (S.D.N.Y., 1961), in which BBI is plaintiff and in which the issue of whether in-court statements of counsel can constitute an act of state has been raised. BBI argues that such statements cannot constitute an act of state, and that a holding to the contrary would reward repudiation of contractual obligations and curtail international trade.

^11/ Pet. Br. at 8.

^12/ Id.

^13/ Id. at 12.

^14/ Id.

^15/ Id.

^16/ Id. at 14-15.

^17/ Id. at 15.

^18/ Id. at 16.

^19/ Id. at 16-17.

^20/ Id_. at 17.

^21/ Id_. at 18-19, citing S. 566 and H.R. 3493, 93d Cong., 1st Sess. (1973).

^22/ Id. at 19.

^23/ Id. at 19-2 0.

^24/ Id. at 20.

^25/ Id. at 22.

^26/ Id. at 23.

^27/ Id.

^28/ Id. at 24.

^29/ Id. at 25.

^30/ Brief for Respondents, August 29, 1974 [hereinafter cited as Br. Resp.] at 7-11.

^31/ Id. at 12.

^32/ Id. at 13.

^33/ Id. at 14, citing 406 U.S. at 773, 793 et seq.

^34/ Id_. at 15.

^35/ Id_. at 16.

^36/ Id. at 17.

^37/ Id_. at 17-18.

^38/ See p. 149, supra.

^39/ Br. Resp. at 16 n.8.

^40/ Id. at 18.

^41/ Citing Underhill v. Hernandez, 168 U.S. 250 (1897), Oetjen v. Central Leather Co., 240 U.S. 297 (1918), and Ricaud v. American Metal Co., 246 U.S. 304 (1918).

^42/ Citing French v. Banco Nacional, 23 N.Y.2d 46 (1968).

^43/ Citing Bernstein v. van Heyghen Freres, S.A., 163 F.2d 2T 6 (2d Cir. 1947), cert, den., 332 U.S. 772 (1947).

^44/ Br. Resp. at 20.

^45/ Id. at 21-22.

^46/ Id. at 22.

^47/ Id.

^48/ Id. at 23.

^49/ Id. at 24.

^50/ Note that a letter from the Legal Adviser, Department of” State, was later transmitted to the court, and is reproduced infra at p. 164).

^51/ Br. Resp. at 24.

^52/ Id. at 25.

^53/ Id.

^54/ Reply Brief at 1-2.

^55/ Id. at 2.

^56/ Id. at 3.

^57/ Id

^58/ Id. at 3-4.

^59/ Id. at 4-5.

^60/ Id. at 5.

^61/ Supplemental Brief for the Petitioner [hereinafter cited as Supp. Br. Pet.] at 5.

^62/ Id.

^63/ Id. at 7.

^64/ Id. at 8.

^65/ Id. at 8-9.

^66/ Id. at 9.

^67/ Id. at 10.

^68/ Id. at 13. §9/ Id. at 14.

^70/ Id. at 15.

^71/ Id. at 16-17.

^72/ Br. Resp. Re. at 1.

^73/ Id. at 3.

^74/ Id. at 5-6.

^75/ Id. at 7.

^76/ Id. at 8.

^77/ Id. at 9.

^78/ Id. at 11.

^79/ Id. at 12.

^80/ Id. at 12-13.

^81/ Id. at 21.

^82/ Id. at 22.

^83/ Br. U.S. at 17.

^84/ Id. at 18.

^85/ Id. at 24.

^86/ Id. at 24-26.

^87/ Id. at 26-27.

^88/ Id. at 27.

^89/ Id.

^90/ Id. at 28.

^91/ Id. at 30-31.

^92/ Id. at 31.

^93/ Id. at 36.

^94/ Id. at 36-37.

^95/ Id. at 41.

^96/ Id. at 42.

^97/ Brief for Respondents in Reply to the Brief for the United States as Amicus Curiae, January 12, 1976

^98/ Id. at 5.

^99/ Id., at 6-7.

^100/ Id. at 9.

^101/ Id. at 9-10.

^102/ Id. at 12.

^103/ Id. at 13-15.

^104/ Id. at 14.

^105/ Id. at 15.