Morgan Guaranty Trust Company of New York and Others v. Republic of Palau

Abstract

States — Definition of State — Attributes of statehood — Sovereignty over territory — Authority over nationals — Independence — Capacity to join with other States to make international law — Trust territory — Whether possessing attributes of statehood — Trust Territory of the Pacific Islands — Republic of Palau — Location of sovereignty in Palau — Compact of Free Association with the United States — Whether Palau enjoying de facto statehood — Failure to ratify Compact — Continuation of trusteeship — United States Foreign Sovereign Immunities Act 1976 — Whether Palau a foreign State for purposes of Act

State immunity — Jurisdictional immunity — Commercial activity exception — Loan agreement for construction of power station — Whether commercial — Default on government debt — Whether a commercial act — Waiver — Authority to waive immunity — Republic of Palau — Whether President of Palau authorized to waive immunity — Act of United States High Commissioner on Palau suspending statutory provision for waiver of immunity — Effect on authority of President of Palau — Significance of other dealings between Government of Palau, United States Government, United Kingdom Government and lending institutions — United States Foreign Sovereign Immunities Act 1976

International organizations — United Nations — Trusteeship system — Nature of trusteeship — Strategic trust territory — Sovereignty over trust territory — Constitutional changes in territory — Termination of trusteeship — Requirement of Security Council approval — Whether trusteeship may be terminated de facto without Security Council approval — Trust Territory of the Pacific Islands — Palau

Territory — Trust territories — Sovereignty over trust territories — Whether vested in administering authority — Constitutional changes in trust territory — Whether trust territory can become de facto State — Trust Territory of the Pacific Islands — Palau

Economics, trade and finance — State loans — Agreement between government of trust territory and commercial banks guaranteeing loan — Loan to be used for construction of power station — Whether commercial agreement — Authority to conclude — Whether sovereign immunity applicable — Involvement of United Kingdom Export Credit Guarantee Department — Whether making transaction inter-governmental

Relationship of international law and municipal law — Conduct of foreign relations — Trust territory — Conduct of foreign relations by administering authority — Effect on statehood — Application of international law criteria of statehood by municipal court — The law of the United States