Reparation for Injuries Suffered in the Service of the United Nations

International Court of Justice

1949 I.C.J. 174

Facts

The United Nations (UN) requested an advisory opinion from the International Court of Justice (ICJ) on
two primary questions. First, it asked whether, when an agent of the UN is injured while performing
duties relating to an individual State, the UN may bring an international claim against the State’s
government for damages caused to either the UN or to the victim. In the event of an affirmative answer
to the first question, the UN also requested an answer on the following question: when both the UN and
an individual State have an interest in the same international claim, does the UN’s interest in bringing
the claim outweigh the State’s interest in either providing diplomatic protection for its offending
national, or bringing the claim itself, depending on the factual circumstances present?

Tinoco Claims Arbitration (Great Britain v. Costa Rica)

William H. Taft, Sole Arbitrator

1 U.N. Rep. Int’l Arb. Awards 369 (1923)

Facts

The “Tinoco regime” came to power through a coup in Costa Rica in 1917. It lasted for two years. During
this time, the Tinoco regime was recognized as legitimate by some States, but not large powers such as
Great Britain (plaintiff). During its time in power, the Tinoco regime entered into several contracts
(including an oil concession) with the British government. When the regime fell in 1919, Great Britain
brought suit against Costa Rica (defendant) to enforce the contracts and collect on the Tinoco regime’s
liabilities. Costa Rica argued that the Tinoco regime was not a recognized government capable of
entering into contracts on behalf of the State. Additionally, Costa Rica argued that since Great Britain
itself did not recognize the Tinoco regime as a government, it could not claim that Tinoco conferred
enforceable rights such as the oil concession on British citizens. In March 1923, the case was considered
by an Arbitrator, United States Chief Justice William H. Taft.
WALTER UPRIGHT, PLAINTIFF, v. MERCURY BUSINESS MACHINES CO., INC., DEFENDANT

Aug 1

This is an action brought by a plaintiff assignee on a trade acceptance drawn by its assignor on itself and
accepted by defendant, representing a balance due for machinery sold to defendant. The complaint
alleges that the assignor was a corporation organized and existing under the laws of West Germany,
having its principal place of business in West Berlin, Republic of West Germany. The motion at bar seeks
an order under subdivisions 1 and 2 of rule 107 of the Rules of Civil Practice dismissing the complaint on
the grounds that the court does not have jurisdiction of the subject matter of the action and/or plaintiff
does not have legal capacity to sue.

The basis of the motion is a contention that the plaintiff’s assignor is a State-controlled enterprise of the
German Democratic Republic. In support thereof, the defendant submits a copy of a communication
from the Chief of the Economic Affairs section of the United States Mission in Berlin to the Department
of State. Plaintiff’s affidavits in opposition state that it has been advised by its assignor that it was
founded by residents of the German Democratic Republic under the Limited Liabilities Company Law of
1892 and its founding is permitted in the German Democratic Republic; that it has no office in West
Berlin but has concluded contracts with firms in that city and in West Germany; that the negotiations
with defendant were carried on in West Germany. The matter was sent to an Official Referee to hear
and report with his recommendation on this issue.

It has now been conceded that the said assignor was not a West German corporation but rather an East
German corporation. Upon such concession the court cannot recognize the existence of a juridical
creature of a government we do not recognize. The court will take judicial notice that the German
Democratic Republic is not recognized by our Government. However, even though plaintiff’s assignor
would have no right to sue in this court as a corporation since the recognition of that legal entity is
barred by the foreign policy of the United States Government, nevertheless it cannot be denied that
some organization or group of persons does exist and entered into a commercial transaction with the
defendant. If it were clear that this group of people consisted of private citizens unconnected with the
unrecognized government, the court is of the opinion that no further question would exist. The foreign
policy of the United States Government does not require us to deny that there are people residing in
and doing business in a certain geographical area. No prohibition or restriction seems to have been
imposed on trading in the items which are the basis of this cause of action. Where, as here, it has
received the benefits of the commercial transaction, it would be inequitable to permit defendant to
retain the fruits thereof without compensation. The point made by defendant that it would not be able
to enforce a proposed counterclaim against plaintiff’s assignor in an East German court is not well taken.
It does have an opportunity to press any claim it may deem advisable in connection with the subject
transaction in this court.
However, overriding foreign policy considerations may make necessary a denial of access to our courts
in the event it is determined that the defendant dealt in some form with the unrecognized Government
of the German Democratic Republic.

If plaintiff’s assignor is as a matter of fact wholly owned by the so-called German Democratic Republic, it
would, by that fact, have no capacity to sue in our court, regardless of its organization. Whether this be
so still remains to be determined, since the proof submitted on this issue is inconclusive.

Plaintiff’s contention that a claim of incapacity to sue cannot be set up against him, despite the refusal
of recognition, in that he is an American citizen and a resident of the State of New York, is without merit.
He can have no greater rights than his assignor.

The subject matter of the contentions urged in support of dismissal under both subdivisions 1 and 2 of
rule 107 of the Rules of Civil Practice appears to be identical. It is not that the court does not have
jurisdiction of the subject matter, but the question is whether the assignor has capacity to sue and the
court will entertain the action.

It appears from defendant’s letter of December 9, 1959, that the sole issue tendered to the Official
Referee was the state of organization of the assignor corporation. It is now agreed that it is an East
German corporation. Accordingly, the motion to dismiss is denied with leave to defendant to raise the
matter by defense in its answer, unless the parties agree to a prior trial of the issues as herein stated, in
which event an order will be settled.

Disposition

Accordingly, the motion to dismiss is denied with leave to defendant to raise the matter by defense in its
answer, unless the parties agree to a prior trial of the issues as herein stated, in which event an order
will be settled.