Commercial Litigation and Arbitration

Foreign Sovereign Immunities Act — Commercial Activity Exception — Actual vs. Apparent Agency

To satisfy a judgment against the nation of Iran, the plaintiffs in Rubin v. Islamic Republic of Iran, 2007 U.S. Dist. LEXIS 24376 (N.D. Ill. March 19, 2007), sought to attach Persian artifacts in the United States. Section 1609 of the FSIA, 28 U.S.C. § 1609, provides that ‛the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611….“ Section 1610(a) provides the ‛commercial activity“ exception: ‛The property in the United States of a foreign state … used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment…“

Plaintiffs argued that Iran engaged in commercial activity in the United States through the actions of its agent, the University of Chicago, which housed the Persian artifacts at issue. One question for the Court was whether the plaintiffs were required to prove actual agency or whether apparent agency would suffice. Looking to cases decided under the commercial activity exception in § 1605 (dealing with jurisdiction), the Court observed that ‛the existing cases hold that actual agency is required,“ and granted leave to the plaintiffs to take additional discovery in accordance with Fed.R.Civ.P. 56(f) and deferred decision on defendants’ motion for summary judgment.

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