Supreme Court of the United States

Republic of Argentina v. Weltover, Inc.

June 12, 1992504 U.S. 607

Summary

Justice Scalia delivered the unanimous opinion holding that Argentina was subject to jurisdiction under the Foreign Sovereign Immunities Act’s commercial-activity exception. Argentina’s issuance of negotiable bonds was commercial because it acted as a private market participant, regardless of its sovereign economic objectives. Rescheduling payments had a direct effect in the United States because payment was due in New York. The statute requires neither substantiality nor foreseeability beyond its express direct-effect requirement, although purely trivial effects do not suffice. Assuming without deciding that foreign states have due process rights, Argentina had sufficient minimum contacts with the United States. The Court affirmed the Court of Appeals’ judgment. There were no separate opinions.

Holding

  • Whether issuing the Bonods constituted commercial activity.. Argentina’s issuance of the Bonods was commercial activity, and its unilateral rescheduling of payment was taken in connection with that activity.
  • Whether rescheduling the bonds caused a direct effect in the United States.. Rescheduling payments due in New York caused a direct effect in the United States, satisfying the third clause of § 1605(a)(2).
  • Whether due process concerns required narrowing the direct-effect requirement.. Due process concerns did not require a narrower statutory construction because Argentina possessed constitutionally sufficient minimum contacts, assuming without deciding that a foreign state is a person protected by the Due Process Clause.

Docket 91-763

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