North East Shipping Corporation v Pakistan

• Date: 23 April 1975
• Court: U.S. District Court — Southern District of New York

United States, District Court, Southern District, New York.

(Metzner, District Judge)

North East Shipping Corporation

and

Government of Pakistan

Sovereign immunity Foreign States Action to confirm arbitration award against the Government of Pakistan Whether State Department's refusal to suggest immunity binding on Court Whether Court should exercise its discretion to refuse to entertain the action Political question The law of the United States

Summary: The facts:In 1957 a ship owned by the plaintiff corporation carried cargo consigned to the East Pakistan Fertilizer Development Corporation (EPADC), an agency of the Provincial Government of East Pakistan. As a result of a casualty sustained during the voyage, the plaintiff commenced arbitration proceedings against EPADC which resulted in an award in favour of the plaintiff. The plaintiff brought an action in the District Court to enforce the award against the Government of Pakistan. The plaintiff alleged that:

(1) The Government of Pakistan was liable on the award because it had assumed complete control of EPADC's role in the arbitration proceedings and had exerted that control in support of its own interests;

(2) The defendant was the alter ego of EPADC;

(3) Following the disappearance of the Provincial Government of East Pakistan the defendant had attempted to collect all maritime claims which were outstanding in favour of the Provincial Government of East Pakistan or any of its agencies which had arisen from the carriage of cargoes financed by the Government of the United States. The defendant was therefore required to undertake all liabilities of the Provincial government of East Pakistan arising from those transactions.

The plaintiff further noted that the defendant had made an application to the Department of State for a suggestion of immunity in this case. The application had been denied and the plaintiff alleged that the Court was bound to accept the determination of the Executive. The defendant claimed sovereign immunity and moved to dismiss the action. The defendant also requested that the Court exercise its discretion to refuse to entertain the action since it presented a political question in that the Court would have to decide issues as between Pakistan and Bangladesh, and as among Pakistan and India as a result of the establishment of the Government of Bangladesh.

Held:The motion to dismiss was denied. The State Department's refusal to suggest immunity for the Government of Pakistan was...