TOP 3 CASE LAWS UNDER RECOGNITION.

    Edited by: Vaani Garg


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    Luther v. Sagor (1921)

                                                         

    Principle laid down in the case:

    Once a government is recognized, its acts will be granted as valid, even those prior to its recognition, known as retrospective effect.

    Facts of the case:

    Luther was a British Citizen who used to run a Timber industry in Soviet Russia. On 1917 the Russian Government nationalized his factory and thereafter Mr.Luther left Russia and went to the UK.

    In 1920, Mr.Sagor came to an agreement with a Russian Nationalized business company to buy some timber. The company sent timbers accordingly but when timbers reached UK, Mr. Luther claimed that those timbers were his. He pointed out that as UK never recognized the government of Russia as well as the fact that Russia wrongfully took over his factory, therefore, the civilized court of UK cannot validate the rule of Russian law.

    The lower court held the judgment in Luther’s favour but on appeal to the Kings Bench Division it held that they cannot interfere in an internal matter of another state. This was because in the meantime Russia was given the de Facto Recognition. Along with this, the court also declared the retrospective effective on that recognition form 1917.

    Issues of the case:

    1. Where Russia is recognized by Britain?
    2. Whether the nationalization was legal or valid

    Decision:

    It was held that the British Government recognized the Government of Russia and retrospective effect would be applicable for that recognition. Hence, the Nationalization by Russia was legal and valid.

    Reasoning:

    The Kings Bench Division held that they cannot interfere in the internal matter of another state, because in the meantime Russia was given the de Facto Recognition. The court also declared the retrospective effective on that recognition form 1917. Therefore,  the Nationalization by Russia was legal and valid.[1] 

    The Arantzazu Mendi Case (UK) 1939 Ac (House of Lords)

    Principle laid down in the case:

    When there is effective control over the territory of a government of de facto recognition, a foreign court can not apply its jurisdiction over its matter.

    Facts of the case:

    During the Spanish Civil War, the UK recognized de jure the Republican government of Spain, but also recognized de facto the rebel government (the Nationalists). Both governments sued in British courts to control the Spanish-flagged vessel Arantzazu Mendi, when it arrived in a British port.

     Issue of the case:

    Whether the republican government shall have the right to possess the ship?

    Decision

    It was held:- A de facto government has control over state assets within the territory it controls while a de jure government has control even over state assets abroad.[2]

    Reasoning

    It was held by the House of Lords that since the Nationalist was a de-facto recognized sovereign ineffective contract over a large portion of Spain, it was immune from the jurisdiction of the local courts of other sovereign[3].

      

      Civil air transport Inc. v. Central air transport corp. (1953) AC (privy council)

    “Communist forces having obtained effective control over most of Chinese mainland, proclaimed itself the Government of people’s Republic of China, on 1st October 1949. The Nationalist government withdrew from the mainland China and established its headquarters in the island of Formosa.

    By September 1949, the Nationalist government employees had flown to Hong-Kong forty aircraft belonging to the Central Transport Corp. and its assets were declared by the people’s republic to be their property.

    On 12th December 1949, the Nationalist government sold the aircraft to a United States partnership who in turn sold it to Civil Transport Inc. a US company. On the midnight of 5/6 January 1950, the United Kingdom recognized the People’s Republic as the de-jure government of China instead of Nationalist Government.  

    This sale was followed by an action to quiet title in the local Hong Kong court. The action made its way to the Supreme Court of Hong Kong who ruled that because the British Government recognized the Communist Government as the Government of China the transaction was invalid.

     However, upon appeal to the privy council in Britain, the court found the transaction valid as it occurred a few months before Britain officially recognized the Communist Government. The remaining air crafts were immediately transferred to an american aircraft carrier and shipped back to the United States [4].


    [1] Luther v. Sagor [(1921)3 KB 532,]

    [2] The Arantzazu Mendi Case (UK) 1939 Ac (House of Lords)

    [3] https://www.i-law.com/ilaw/doc/view.htm?id=142591

    [4]www.chinaaviationlaw.com