Case 7: Robco, Inc. v. Honduras. Robco, Inc., was a Florida arms dealer. The arm

Question

Case 7: Robco, Inc. v. Honduras.

Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract by purchasing the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras.

TRUE OR FALSE WITH EXPLANATION:

1. Robco’s lawsuit against the government of Honduras will be permitted to proceed in federal district court, because Honduras is not exempt from jurisdiction in U.S. courts under the Foreign Sovereign Immunities Act.

2. Robco’s lawsuit against Honduras will likely be dismissed, because permitting Robco to sue Honduras violated the act of state doctrine under which the courts of one country will not question the validity of public acts committed by a foreign government.

3. If the new Honduras government enacted a law making it illegal to purchase weapons from foreign arms dealers, the federal district court would likely dismiss Robco’s lawsuit against Honduras.

4. Assuming the federal district court hears the case and awards damages to Robco, but the government of Honduras has no assets in the United States that can be used to satisfy the judgment, Robco would be unable to obtain payment of the judgment against Honduras.

5. If the government of Honduras violated the human rights of its citizens, Robco might be found liable for those violations under the Alien Tort Claims Act, if it was aware of those violations and could have taken steps to prevent those violations.

1. Robco’s lawsuit against the government of Honduras will be permitted to proceed in federal district court, because Honduras is not exempt from jurisdiction in U.S. courts under the Foreign Sovereign Immunities Act.

Explanation / Answer

1. TRUE Because the armed forces of Honduras contracted to purchase weapons from a U.S. company (Robco), this would fall under the commercial activity exception to the FSIA. The sales contract was an action taken in connection with a commercial activity carried out in the United States, and the sale has a direct effect in the United States. Therefore, the FSIA would not bar this lawsuit.

2.TRUE

Yes -

The act of state doctrine provides that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory. Here, the newly democratic government of Honduras is seeking to reduce the size of its military. The U.S. government likely recognized the new democratic regime since the U.S. supports democratization globally. The U.S. is also likely to be supportive of its efforts to reduce the size of its military and its inventory of weapons. Because the Honduran government's policy decision is a public act within its own territory, the U.S. judicial branch will most likely be unwilling to intervene and force the government to fulfill its contract to purchase arms. There is more at stake than a simple contract because enforcing an arms deal may harm international relations between the U.S. and the new government of Honduras.

3. TRUE The principle of comity is a doctrine of deference. Under this principle, one nation will defer and give effect to the laws and judicial decrees of another country, as long as those laws are consistent with the law and public policy of the accommodating nation. The principle of comity is based on respect and is a customary courtesy extended to other nations. If a U.S. court extends comity to the new Honduran government's law pertaining to arms dealing, then it would dismiss Robco's case.

4.FALSE Under the principle of comity, one nation will defer and give effect to the laws and judicial decrees of another country, as long as those laws are consistent with the law and public policy of the accommodating nation. This would be very useful to Robco in its attempt to collect damages under the award. Robco could take the judgment issued by a U.S. court to any nation in which the government of Honduras does have assets and ask that nation's court to enforce the judgment under the principle of comity.

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