The Foreign Sovereign Immunities Act of 1976: Its Origin, Meaning and Effect

Abstract

Following replacement of Dr. Francois "Papa Doc" Duvalier by his son, Jean-Claude "Little Doc" Duvalier, as President of the Republic of Haiti in 1971, the previously strained relations between Haiti and the United States eased somewhat. Although the United States did not wish to resume direct arms sales to Haiti, it did encourage private armament sales by American firms. Thereafter, Aerotrade, Inc., a Florida corporation, entered into a procurement contract with Haiti agreeing to sell it an assortment of military equipment. Later a dispute arose between the parties over the contract's terms. After negotiations failed, Aerotrade filed suit in the United States District Court for the Southern District of New York to enforce its contract rights by attaching funds of the Banque Nationale de la Republique d'Haiti, as alter ego of the Republic of Haiti, on deposit with First National City Bank. Aerotrade claimed damages for lost profits on orders that Haiti failed to place and $867,000 for goods sold and delivered to Haiti for which payment was never received.