International litigation is the by-product of a commercial world that is economically interdependent and technologically sophisticated, but also subject to disruptions and other changes of position that bring about disputes. The headlines of economic, social, political or military crises, whether in Nigeria, Iran, Poland or Argentina, provide the backdrop for our practice.

The legal and financial issues involved are both intellectually fascinating and practical. In these chapters we will discuss questions arising under such topics as personal and subject-matter jurisdiction in American courts and in forums throughout the world, the enforcement of judgments both here and abroad, forum-selection clauses, choice-of-law clauses, sovereign immunity and its waiver, problems presented by standby letters of credit and attachments of assets here and overseas for both jurisdictional and protective purposes. We will also analyze trends and developments in procedural, jurisdictional and other areas dealt in by litigating lawyers in cases involving foreign law, foreign companies and foreign government authorities.

This chapter is prompted by the Second Circuit’s decision in the Libra Bank case (NYLJ, April 15, 1982, page 1), concerning prejudgment attachment of a foreign state’s assets in the United States. The Second Circuit’s decision is of significance and interest because of the questions it answers as well as the questions it leaves unanswered.

Several years have passed since the enactment of the Foreign Sovereign Immunities Act of 1976 (the FSIA). Although one of the FSIA’s purposes was to prescribe clear rules for determining under what conditions the assets of a foreign state are subject to prejudgment attachment, the FSIA’s provisions are less than clear. Over the past years—because of the Iranian crisis—several federal district courts have considered when a foreign state’s property may be subjected to prejudgment attachment. Predictably, conflicting decisions have resulted.

On April 12, 1982, the Second Circuit, in Libra Bank Limited v. Banco Nacional de Costa Rica, S.A., squarely considered when a plaintiff is entitled to attach the assets of a foreign state under section 1610(d) of the FSIA. This important decision—the first reached by an appellate court on this issue—sets forth a test for obtaining prejudgment attachments which should be easier for plaintiffs to meet than the test suggested by the majority of federal district courts which have considered the issue.