Brief Fact Summary. When New YORK City (City) (P) sought declaratory judgments for tax liens it had on buildings owned by India (D) and Mongolia (D) which were valid to the extent the building were used to accommodate diplomatic employees, India (D)and Mongolia (D) contended that they were immune under the Foreign Sovereign Immunities Act from New York City’s suit.
Synopsis of Rule of Law. A foreign government is not immunized from a lawsuit to declare the validity of tax liens on property held by the sovereign for the purpose of accommodating its employees as stated under the Foreign Sovereign Immunities Act of 1976 (FSIA).
Issue. Is a foreign government immunized from a lawsuit to declare the validity of tax liens on property held by the sovereign for the purpose of accommodating its employees as stated under the Foreign Sovereign Immunities Act of 1976 (FSIA)?
Held. (Thomas, J.) No. A foreign government is not immunized from a lawsuit to declare the validity of tax liens on property held by the sovereign for the purpose of accommodating its employees as stated under the Foreign Sovereign Immunities Act of 1976. A foreign state is presumed to be immune from suits as stipulated under the FSIA unless a specific exception applies. The statute’s text is the court’s starting point in determining the immovable property exception scope.
We begin, as always, with the text of the statute.
View Full Point of LawDiscussion. Both defendants would have still be immunized against any form of foreclosure even if the tax lien in this case was declared valid. However, once a court has declared property tax liens valid, foreign sovereigns would traditionally concede and pay. This is one benefit which the City (P) would have gained for having the liens validated. If per adventure the sovereign did not obey the court to pay, such a sovereign would have experienced a reduction in foreign aid been extended to it by the United States by 110 percent of the outstanding debt, and this would make liens enforceable against subsequent purchasers.