Economic Agreement Case

CourtObsolete Court (Germany)
Docket NumberCase No. 67
Germany, Court of the Reich in Labour Matters.
Case No. 67
Economic Agreement Case.

Jurisdiction — Immunity from — Foreign States — Activities of a Private Law Nature — Russian Trade Delegations — Russo-German Agreement of October 12, 1925.

The Facts.—Article 9 of the Economic Agreement of October 12, 1925, between Germany and Russia provided as follows:

“So long as more extensive rights are not accorded by the U.S.S.R. to third Powers, the U.S.S.R. may not be rendered responsible for the legal acts of State undertakings which, independently of the Trade Delegation, transact business in Germany or with Germany, unless such responsibility has been expressly assumed, for instance, in the form of a guarantee or joint liability assumed by the Trade Delegation. State undertakings in concluding business shall point out in writing to the other parties to the contract that the mere approval of the transaction by the Trade Delegation, when such approval is necessary, does not imply any guarantee.

“Legal acts consummated in Germany by the above mentioned undertakings, and the economic effects of these acts, shall be subject to German law and to German jurisdiction and procedure for compulsory execution. The property of these undertakings situated in Germany may be constituted into a guarantee without any restriction.

“The statutes and balance-sheets of these undertakings and the names of the persons entitled to represent them shall be regularly published by them in Germany, even if the undertakings in question have not been entered in the Commercial Register.”

In the course of 1930 the plaintiffs, who were metallurgical workers, entered in Germany into an agreement to go to Russia and work there in one of the State undertakings. The agreement was not concluded with the Russian Trade Delegation. According to the submissions of the plaintiffs, who were not clear on this point, the agreement was made either with the representative of the State undertaking in question (the Orga Metal Company) or with a representative of the Supreme Economic Council of the Soviet Union. It appeared that the Soviet authorities subsequently unilaterally terminated the agreement after the plaintiffs had spent some time in Russia. They brought the present action against the Russian Trade Delegation in Berlin on the grounds: (a) that the arrangements of their journey in 1930 were made with the Trade Delegation; and (b) that that Delegation in any case represented the Soviet Government. The...

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