Arms Sales Commission Agreement Case

Date10 Octubre 1972
CourtCourt of Appeal of Koblenz (Germany)
Federal Republic of Germany, Superior Provincial Court (Oberlandesgericht) of Coblenz
Arms Sales Commission Agreement Case1

Sovereign immunity Foreign States Claim for payment under arms sales commission agreement Whether foreign State entitled to jurisdictional immunity Restrictive theory of sovereign immunity Acts iure imperii and iure gestionis The law of the Federal Republic of Germany

Summary: The facts:The plaintiff2 brought an action for payment of commission to which he claimed to be entitled under a verbal agreement for having arranged arms sales for the defendant, Republic P.3 The Provincial Court (Landgericht) of Coblenz held that the defendant foreign State was subject to German jurisdiction. This question was again considered in proceedings before the Superior Provincial Court (Oberlandesgericht) of Coblenz.

Held:The defendant was subject to German jurisdiction.

According to established case law in the Federal Republic immunity from domestic jurisdiction was only granted for sovereign activities and not for activities governed by private law, this classification was normally to be made according to municipal law and the nature rather than the purpose of the act in question was the decisive factor. Without deciding whether the law of the Federal Republic or the law of Republic P. should be applied, the Court found that under both laws the alleged agreement would be governed

by private law. It was true that defence and the maintenance of armed forces were sovereign functions and that the actual agreements for the sale of arms might have a public law character but the plaintiff based his claim on a commission agreement which had an independent nature

The following is the text of the judgment of the Court;

The plaintiff brought an action against the defendant, the Republic of P, for disclosure, accounts and payment of broker's commission to which he claimed to be entitled for having arranged arms sales on behalf of the defendant. He claimed that in the course of negotiations with the directors of arms factories and with the head of a section of the War Ministry he had been promised verbally a commission of 5% of the gross receipts for all arms sales made by the defendant through his mediation. As a result of this mediation the defendant was able to sell larger quantities of arms and ammunition to other States.

[The Court dealt with various procedural points and continued;]

The action is admissible.

The defendant, as the Provincial Court of...

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