On the Extraterritorial Effect of Foreign Expropriation Decrees

• DOI: 10.1177/106591295100400102
• Date: 01 March 1951
• Published date: 01 March 1951
• Subject Matter: Articles

ON THE EXTRATERRITORIAL EFFECT OF FOREIGN
EXPROPRIATION DECREES
MARTIN DOMKE
New York, N. Y.
OR
a long time it has been a rather widely accepted legal axiom that
foreign decrees serving economic and social purposes of the legislative
’*’
country should not be allowed to have any application outside of that
country; in other words, that the assets of its nationals in another country
should not become available to the government by reason of any decree
appropriating such property abroad. Owners and their creditors would
otherwise be deprived of the disposal of these assets in favor of the pro-
tection of the country’s national economy at large.
This doctrine is reflected in many court decisions of various countries
which followed the events of the Soviet nationalization decrees of 1918,
the Mexican oil expropriation acts and the Spanish Civil War of 1936.
More recently, legislation on the commissars of the occupying authorities
in Austria and Czechoslovakia,’ nationalization decrees in the Baltic
countries after their military occupation by the Soviet Union in 1941,2
and the expropriation measures in Eastern Germany3 and Czechoslovakia4
4
were also refused any recognition as to assets located outside the boundaries
of the legislating authorities. Numerous court decisions indicate that the
trend of non-recognition of foreign measures outside of the legislative
country has been maintained, though such decisions have often been based
on the nonrecognition of a foreign government itself.5 A
further reason for
denying extraterritorial application to such foreign decrees has been their
confiscatory character; they generally deprived owners of property abroad
of its disposal without giving them fair and adequate compensation.
The principle of nonrecognition of foreign economic decrees outside
of the legislative country had, however, to undergo some changes during
1
For the court decisions of various countries, see Martin Domke, Trading with the Enemy in World
War II (New York: Central Book Company, 1943), p. 179, and The Control of Alien Property
(ibid. 1947) pp. 126, 299.
2 Latvian State Cargo and Passenger S.S. Line v. Clark, Attorney General of the United States, 80 Federal
Supplement 683 (1948); Laane and Baltser v. Estonian State Cargo and Passenger Steamship Line,
(1949) 2 Dominion Law Reports 641 (Can. Sup. Ct.).
3 See Note, "German Court Voids Title Acquired Under Czech Confiscation Decree," 63 Harvard Law,
Review 538 (1950); Court of Appeals, Nürnberg, Germany (September 19, 1949), 3 Neue Juristische
Wochenschrift 228, Note by Philipp Moehring (München and Berlin: C. H. Beck, 1950); 5 Süd.
deutsche Juristen-Zeitung, Col. 277, Note by Ludwig Raiser (Heidelberg: Lambert Schneider, 1950).
4
Wichert v. Wichert, Swiss Federal Tribunal, October 28, 1948, BGE (Reports of Decisions of the Federal
Tribunal), Vol. 74, part II, p. 225; Hoffman v. Dralle, Austrian Supreme Court, May 10, 1950,
66 La Propriété Industrielle 218 (Berne, Switzerland: Bureau International pour la Protection de la
Propriété Industrielle, 1950).
5
As to (Communist) China, see Bank of China v. Wells Fargo Bank &
Union Trust Co., 92 Federal
Supplement 920 (1950), and Chase National Bank of the City of New York v. Directorate General
of Postal Remittances, New York Law Journal (June 8, 1950) 2042. Cf. Civil Air Transport Inc. v.
Chennault and Others (1950), Supreme Court of Hongkong, 3 International Law Quarterly 418, Note
by L. C. Green (London: Stevens, 1950).
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World War II. This was especially the case with various decrees of
governments-in-exile vesting in themselves claims of residents of the
mother countries to assets abroad and thus preventing the German occu,
pant from looting such assets. In...