The Court also specifically rejected arguments by the plaintiffs that COSCO had waived its sovereign immunity by executing and filing with the Federal Maritime Commission an "Application for Certificate of Financial Responsibility" (Oil Pollution) and a similar application in regard to water pollution, by appointing an agent for service of process in the United States, or by accepting in connection with the Hong Kong transshipment Sea Queen bills of lading containing a New York choice-of-forum provision for litigation of claims thereunder.

The Court found that the Federal Maritime Commission (FMC) applications had been filed pursuant to the Federal Water Pollution Control Act, 33 U.S.C. 1321, and FMC regulations, in order to permit COSCO ships to transit the Panama Canal or call at a United States port. The designation of an agent for service of process, also required as part of the applications, had been executed, the Court held, solely for complying with FMC regulations and had not been intended as a waiver of sovereign immunity in matters unrelated to the Water Pollution Act.

The Court examined affidavit evidence from an officer of the designated agent: that COSCO did no business in New York nor had the agent ever solicited any, nor entered into any contracts on COSCO's behalf in New York, and that none of COSCO's ships had ever entered New York. The nature of the relationship, the Court concluded, belied either an explicit or an implicit waiver of sovereign immunity in consequence thereof.

Nor did choice-of-forum provisions in the Sea Queen's "receipt-like" bills of lading constitute a waiver of immunity, the Court ruled. They had not been issued by COSCO, nor issued to the plaintiffs; and while the choice-of-forum provisions might "arguably constitute a waiver of immunity in a COSCO/Sea Queen controversy . . . [t]hey were obviously not intended . . . to govern contractual relations between COSCO and the cargo interest plaintiffs, particularly since the COSCO bills issued to plaintiffs specifically provided for resolution of all controversies in . . . [the People's Republic of China].” 493 F. Supp. at 625.

The Court's conclusion regarding COSCO's immunity led it to refrain from addressing other contentions raised by the parties. It noted, however, that questions about the nature of People's Republic of China procedures for resolving such disputes had been raised at the oral argument in connection with COSCO's alternative contention for dismissal on the ground of forum non conveniens. In response to the Court's inquiry, COSCO's attorney had obtained from both his client and the China Council for the Promotion of International Trade (“CCPIT”) a telex describing such procedures, which the Court included as an appendix to its opinion, believing, it said, "that this may be one of the first occasions that such information has been made generally available." 493 F.Supp. at 625-626.

In Waukesha Engine Division, Dresser Americas, Inc. v. Banco Nacional de Fomento Cooperativo, 485 F.Supp. 490 (E.D. Wis. 1980), an action by a marine engine manufacturer against a Mexican government banking institution for alleged breach of contract, Judge Myron L. Gordon denied the plaintiff's motion for summary judgment on the issue of jurisdiction and dismissed the action on February 29, 1980.

The Court pointed out that "it was plain that due process notions of minimum contacts" had been incorporated into the Foreign Sovereign Immunities Act, which had been patterned after the District of Columbia long-arm statute enacted by the Congress. The Court then turned to two Wisconsin commercial cases in point, that involved non-Wisconsin private corporate defendants, as its guide for holding: (1) that the mere existence of a contract for production of engines, with no other contacts by the defendant with Wisconsin, such as business facilities, property, bank deposits, or telephone listings, was insufficient to satisfy due process requirements; and (2) that a single inspection visit by a group of the defendant's officers to the facility in Wisconsin at which the engines were to be made, before contracting to buy them, was not “jurisdictionally significant.”

The cases in question were Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 597 F.2d 596 (7th Cir. 1979) and Wisconsin Electrical Manufacturing Co. v. Pennant Products, Inc., 472 F.Supp. 855 (E.D. Wis. 1979).

In Bankers Trust Company v. Worldwide Transportation Services, Inc, 537 F.Supp. 1101 (E.D. Ark. 1982), decided on Apr. 29, 1982, District Judge Elsijane T. Roy noted that Waukesha was the only case she had found in which an individual State of the United States, rather than the entire country, had been used for purposes of contacts analysis. Judge Roy pointed out that the vast majority of courts interpreting the Foreign Sovereign Immunities Act had considered the entire United States to be the appropriate forum. In Waukesha, she had found an apparent assumption by all parties and the court that the decision should be "patterned upon a standard diversity analysis," under which . . . Wisconsin was "naturally, the focal point."

537 F. Supp., at 1109.

Thos. P. Gonzalez Corporation v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247 (9th Cir. 1980), also involved the question of minimum contacts in an action for breach of contract.

There the defendant, an autonomous institution of the Republic of Costa Rica, operating under its own organic law and with appropriated funds, was engaged, among other things, in regulating the national Costa Rican food supply by both buying and selling grain. It had entered into a series of contracts with Gonzalez over several years, each transaction having originated in a bid by a Gonzalez representative in Costa Rica in response to a general invitation for bids. All contracts specified delivery in Costa Rica, and in none was California either the source or the destination of the grain. The

contracts specified payment by letters of credit in United States or Costa Rican currency, and Consejo made payment by having its Costa Rican bank issue letters that Crocker National Bank in California confirmed.

There was frequent communication about contracts by mail and telex between Consejo and Gonzalez' Los Angeles office; but Consejo had neither an office, a place of business, property, nor an agent in California. It did not advertise in California nor actively solicit business there, and never attempted to qualify for transaction of business within California.

Consejo cancelled the contract in question before delivery was made, citing delays in shipment and, later, Gonzalez' failure to post a completion guarantee as required. Gonzalez filed suit in September 1975, and process was served in October 1975 on instructions of its attorney and without a court order upon the Consul General of Costa Rica in Los Angeles, requesting that he notify the Ministry of Foreign Affairs in San Jose, Costa Rica, "through normal diplomatic channels." Consejo subsequently received notice of the suit, and a copy of the summons and complaint was also delivered personally to its legal adviser while the latter was in California to discuss performance under another contract. The legal adviser arranged for representation, but a judgment by default was, nevertheless, entered in February 1976 (prior to entry into force of the Foreign Sovereign Immunities Act). Substituted counsel afterwards filed a motion to set aside the default judgment and dismiss for lack of personal jurisdiction, as well as a motion for relief from default judgment for mistake, inadvertence, surprise, and excusable neglect. Following argument on the two motions, the U.S. District Court for the Central District of California granted both on March 10, 1977.

On March 10, 1980, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court, deciding the case under the California long-arm statute (California Code of Civil Procedure §410.10), according to which it found that Consejo lacked the requisite minimum contacts to justify exercise of personal jurisdiction.

The Court also rejected Gonzalez' alternative argument that the minimum contacts standard as applied to foreign states had been redefined "by the federal long-arm statute contained in the Foreign Sovereign Immunities Act". It ruled that the "direct effect" requirement contained in the commercial activity exception to immunity from jurisdiction (28 U.S.C. 1602(a)(2)) embodied the minimum contacts standard enunciated by the Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310 (1945), as well as the requirement in Hanson v. Denckla, 357 U.S. 235 (1958), that the defendant must have purposely availed itself of the privilege of conducting business within the forum. Further, the legislative history of the

Foreign Sovereign Immunities Act confirmed, the Court said, that the personal jurisdiction provision set out in 28 U.S.C. 1330(b) did not "extend beyond the limits set by the International Shoe line of cases".

Since personal jurisdiction under the Foreign Sovereign Immunities Act required satisfaction of the "traditional minimum contacts standard", and since it had already determined that Consejo did not have the requisite minimum contacts, the Court stated that it did not need to decide, and, "therefore, decline[d] to consider" whether the action were governed by the Foreign Sovereign Immunities Act.

In Sugarman v. Aeromexico, Inc., 626 F.2d 270 (3d Cir. 1980), a passenger who had had to wait 15 hours at an airport for a return flight from Acapulco to New York, "under extremely brutal conditions" (i.e., without any facilities or adequate food) had sued the airline, claiming that it had negligently failed to alleviate these conditions and had continued to cause him to wait. As a result, the plaintiff alleged, he had suffered cardiac insufficiency, angina, and arrhythmia, that caused physical pain, mental anguish, injury to health, and loss of time and wages. The district court had granted summary judgment for the airline, on the grounds that none of the three commercial activity exceptions to a foreign state's immunity from jurisdiction, set out in 28 U.S.C. 1602(a)(2), applied.

On June 30, 1980, the U.S. Court of Appeals for the Third Circuit reversed, finding jurisdiction. District Judge Louis H. Pollak, sitting by designation on the three-judge panel, found that even though the acts complained of had not taken place in the United States, they had grown out of a regular course of commercial conduct carried on in the United States. The acts had allegedly transpired at the midpoint of a round trip passage purchased in the plaintiff's home state, New Jersey, and had, also, allegedly caused continuing suffering and economic loss to the plaintiff after his return home.

Gemini Shipping, Inc. v. Foreign Trade Organization for Chemicals and Foodstuffs, 496 F. Supp. 256 (S.D.N.Y. 1980), rev'd, 647 F.2d 317 (2d Cir. 1981), was a suit for demurrage on a cargo of rice which the Foreign Trade Organization for Chemicals and Foodstuffs (TAFCO), a Syrian Government-owned entity, had purchased from an American exporter, through the United States Agricultural Attaché at the American Embassy in Damascus, under Public Law 480 financing.

Another Syrian Government-owned entity, the Syrian General Organization for Maritime Transport (SYRIAMAR), had contracted with a Belgian corporation, International Trading and Shipping Enterprises, S.A. (ITRASH), for a vessel to transport the rice to Syria, and ITRASH in turn chartered a vessel through the plaintiff, Gemini, a ship charterer, under an agreement providing for payment of 90 percent of the freight charges upon loading.

Following disagreement between Gemini and ITRASH about the exact amount due, Gemini telexed TAFCO as the ship sailed that it intended to exercise its right of lien over the cargo. Gemini demanded a letter of credit for the full freight charge and a separate letter of credit guaranteeing demurrage at a specified amount, and threatened to divert and sell the cargo if its demands were not met. TAFCO and SYRIAMAR replied by telex that they had already paid the freight to ITRASH, whom they had instructed by telex to settle the matter with Gemini, and that Gemini's rights were only against ITRASH. They protested against any diversion of the vessel or threat to arrange for a lien on the cargo, but they added that they guaranteed payment of demurrage "at both ends." ITRASH paid the freight charges while the vessel was between the United States and Syria, and Gemini, relying on the demurrage guarantee, refrained from exercising its right of lien over the rice cargo, freeing the vessel for unloading. Because of port delays in Syria the vessel took 115 days to unload the cargo with demurrage amounting to approximately $379,000, for which Gemini sued ITRASH in England where, under the terms of the agreement, disputes were to be resolved. A default judgment against ITRASH amounting to more than $422,600 remained unpaid, and Gemini asked TAFCO and SYRIAMAR to honor the demurrage guarantee. They refused.

Gemini sued TAFCO and SYRIAMAR under the Foreign Sovereign Immunities Act to enforce its demurrage claim, on the grounds that the action was based upon a commercial activity carried on in the United States by the foreign state, or, in the alternative, upon an act performed in the United States (the telex guaranteeing payment of demurrage), in connection with a commercial activity of the foreign state elsewhere. On September 15, 1980, Judge Milton Pollack of the United States District Court for the Southern District of New York granted the defendants' motion to dismiss for lack of in personam jurisdiction.

Judge Pollack concluded that neither defendant ever transacted or negotiated any business activity in the United States.

On appeal, the United States Court of Appeals for the Second Circuit reversed and remanded on April 16, 1981, under an expanded finding of facts and in the light of the Act's legislative history. Circuit Judge Irving R. Kaufman found that Syria's Public Law 480-financed rice purchases fell within the definition of "commercial activity" in 28 U.S.C. 1603(d) (the nature, and not the purpose, of the transaction determines its character). The Court referred in this regard to hearings on the (proposed) Foreign Sovereign Immunities Act, at which Monroe Leigh, then the Legal Adviser of the Department of State and one of the bill's drafters, had stated: "This would mean, for example, that a foreign state's purchase of