92 THE US-ISRAEL | Legal Review 2025/26 The Court’s Holding In a unanimous opinion authored by Justice Sotomayor, the Court ruled that plaintiffs’ claims did not meet the requirements of the expropriation exception, because “an allegation of commingling alone does not give rise to a plausible inference that specific property ‘exchanged for’ the expropriated property, i.e., the cash proceeds from the sale, is ‘present in the United States.” The Court said that §1605(a)(3) treats all property alike—tangible and fungible—and requires plaintiffs to trace either the specific expropriated property itself or particular property exchanged for it to the United States. The Court ruled that plaintiffs’ commingling theory “stretches ‘exchange’ to the point of breaking.” The Court did not foreclose all commingling-based claims, however. It offered illustrative scenarios in which a plaintiff might still satisfy the nexus— for instance, by identifying a US account holding segregated proceeds, as in Banco Nacional de Cuba v. Sabbatino, 376 US 398 (1964), or by showing that a foreign sovereign spent all funds from a commingled account in the United States shortly after the commingling occurred. The Court further declined to address the applicability of common-law tracing principles, leaving that question for another day while cautioning that any such principles “must be consistent with the overall FSIA scheme.” Broader Significance The decision is a significant marker in the ongoing tension between accountability for historical injustice and the principles of sovereign immunity. The Court carefully balanced the FSIA’s structure—designed to “avoid, where possible, producing friction” in international relations—against the moral imperative of the respondents’ claims. The ruling underscores that the expropriation exception, while a departure from the restrictive theory of immunity, was not intended to be a “radical departure” from the system’s basic principles. And the Court was careful to note that its holding concerned only what plaintiffs must plead to bring suit in US courts—not whether the underlying claims could be brought in another forum. In the Court’s words, quoting the Government’s amicus brief, “the moral imperative has been and continues to be to provide some measure of justice to the victims of the Holocaust, and to do so in their remaining lifetimes.” For Israeli practitioners, this decision resonates on multiple levels. Israel has a deep institutional engagement with Holocaust restitution, and its courts and government agencies regularly encounter questions about the enforceability of claims against foreign states for wartime and historical expropriations. The Simon decision makes clear that the US path for such claims through the FSIA expropriation exception is extremely narrow—particularly for property liquidated long ago and absorbed into a sovereign’s general treasury. The tracing methodology is not categorically excluded, but the standard of plausibility may prove impossible to satisfy in cases involving decades-old commingling across multiple regime changes and institutional upheavals. 2. CC/Devas (Mauritius) Ltd. v. Antrix Corp.: Personal Jurisdiction Over Foreign Sovereigns and the Enforcement of Arbitral Award Background CC/Devas v. Antrix began with a satellite-leasing agreement and ended with a sweeping clarification of “In an era of global commerce, crossborder litigation, and interconnected legal systems, the Court’s rulings on sovereign immunity, executive power, international arbitration, and immigration law have global significance.”
RkJQdWJsaXNoZXIy MjgzNzA=