Legal Definitions - Foreign Sovereign Immunities Act

The Foreign Sovereign Immunities Act (FSIA) is a United States federal law that governs when a foreign government, or an entity owned by a foreign government, can be sued in American courts.

Generally, foreign governments are immune from lawsuits in the United States. This principle, known as sovereign immunity, means that one country's courts typically cannot exercise authority over another sovereign nation. However, the FSIA establishes specific exceptions to this general rule, allowing individuals and companies to sue foreign states in U.S. courts under certain circumstances.

The most significant aspect of the FSIA is that it allows lawsuits against foreign governments for actions that are considered commercial or private in nature, rather than acts that are purely governmental or public. For instance, if a foreign government acts like a private business, it may lose its immunity from suit for those specific actions.

Here are some examples illustrating how the Foreign Sovereign Immunities Act might apply:

• Commercial Activity: Imagine a state-owned airline from Country X enters into a contract with a U.S. aircraft manufacturer to purchase several new planes. If the airline fails to pay for the aircraft as agreed, the U.S. manufacturer could potentially sue Country X's airline in a U.S. court. This is because operating an airline and purchasing equipment are considered commercial activities, not core governmental functions, and therefore fall under an exception to sovereign immunity established by the FSIA.

• Tortious Act in the U.S.: Suppose a foreign government owns an office building in New York City and leases out several floors to private businesses. Due to negligent maintenance by the foreign government's property management, a ceiling collapses, injuring a tenant's employee. The injured employee might be able to sue the foreign government in a U.S. court under the FSIA. The act of owning and negligently maintaining a commercial property in the U.S. is considered a "tortious act" occurring within the United States, which is an exception to sovereign immunity.

• Expropriation of Property: Consider a U.S. company that owns a large manufacturing plant in a foreign country. If that foreign government suddenly nationalizes (takes ownership of) the plant without providing fair compensation, and this action violates international law, the U.S. company might be able to sue the foreign government in a U.S. court. The FSIA includes an exception for cases involving the taking of property in violation of international law, allowing U.S. courts to hear such disputes.