National Petrochemical Co. of Iran v. M/T Stolt Sheaf

Brief Fact Summary. A suit which was brought by an Iranian corporation (P) in a U.S. federal court was dismissed by the district court on the premise that the United States had never extended recognition to the Islamic Republic of Iran. The Iranian corporation was the plaintiff in the case.

Synopsis of Rule of Law. If a foreign government has not been formally recognized by the United States, such foreign government is not necessarily barred from access to U.S. courts.

Facts. A suit which was brought by an Iranian corporation (P) in a U.S. federal court was dismissed by the district court on the premise that the United States had never extended recognition to the Islamic Republic of Iran. The Iranian corporation was the plaintiff in the case. The case was entered into by the United States government as amicus curiae by arguing that the Iranian corporation (P) ought to be granted access.

Issue. If a foreign government has not been formally recognized by the United States, will such foreign government be barred from access to U.S. courts?

Held. No. A suit which was brought by an Iranian corporation (P) in a U.S. federal court was dismissed by the district court on the premise that the United States had never extended recognition to the Islamic Republic of Iran. In a situation where formal recognition have been withheld by the U.S. government, recognition can still occur and this is done at times where recognition can be misinterpreted as approval. In this case, the relation between the two countries has not been smooth. Hence, the Executive Branch, which has the power to deal with foreign nations outside formal recognition, has broad discretion involving matters of foreign relations.

Discussion. The point as one clearly hoped for is not illustrated by this case. But the thrust is that the intervention of the U.S. as amicus and its arguments in favor of allowing the case to proceed in the U.S. court system were exercises of the power of the executive branch over matters of foreign relations to which the court deferred.