The Counterclaim Exception

• Author: Ernesto Sanchez
• Pages: 225-228

225

THE C OU N T E RC L A IM EX CE P T IO N

§ 18.1 INTRODUCTION

As Chapter 9 highlighted, a foreign sovereign’s participation in litigation can waive jurisdic-

tional immunity.1 Common law has also long held that “[b]y voluntarily appearing [as a plain-

ti, a foreign sovereign] abandons its immunity from suit and subjects itself to the procedure

and rules of decision governing the forum which it has sought.”2 e FSIA codies these prin-

ciples with its provisions for counterclaims against foreign sovereigns.

§ 18.2 PERTINENT STATUTORY TEXT

28 U.S.C. § 1607 states:

In any action brought by a foreign state, or in which a foreign state intervenes, in a court

of the United States or of a State, the foreign state shall not be accorded immunity with

respect to any counterclaim –

(a) for which a foreign state would not be entitled to immunity under section 1605 or

1605A of this chapter had such claim been brought in a separate action against the for-

eign state; or

(b) arising out of the transaction or occurrence that is the subject matter of the claim of

the foreign state; or

(c) to the extent that the counterclaim does not seek relief exceeding in amount or dier-

ing in kind from that sought by the foreign state.3

§ 18.3 BASIC COUNTERCLAIM JURISDICTION

An entity qualifying as a “foreign state” under the FSIA is subject to counterclaims for all acts

the statute already exempts from immunity in the rst place,4 as well as “any counterclaim

“arising out of the transaction or occurrence that is the subject matter of the claim of the for-

eign state.”5 As the statute’s legislative history indicates,6 this second prong of the counterclaim

exception contains the same terminology as Rule 13(a) of the Federal Rules of Civil Procedure,

which mandates counterclaims when an opposing party also has a claim that (1) arises out of

the transaction or occurrence that is the subject matter of the pleader’s claim and (2) does not

1. See 28 U.S.C. § 1605(a)(1); infra Ch. 9, § 9.3(2)(A).

2. See Guaranty Trust Co. v. United States, 304 U.S. 126, 134 & n. 2 (1938).

3. 28 U.S.C. § 1607.

4. Id. at (a).

5. Id. at (b).

6. See House Report at 6622.

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