Empresa Exportadora de Azucar v Industria Azucarera Nacional S.A, The Playa Larga: CA 1983

There had been a theft by Cuban sellers of one cargo of sugar, property in which had already passed to the buyers, and non-delivery of a second combined with trickery whereby the intended buyers were nonetheless induced to pay its price. The first cargo was on a vessel which was discharging at its Chilean discharge port, when the vessel was withdrawn by the sellers. The second cargo was on the high seas en route to Chile when withdrawn.
Held: The effect of disregarding a provision of foreign law as manifestly contrary to public policy may be to render enforceable in England a contract which is not enforceable by its proper law. The court considered the measure of damages in relation to the non-delivery of goods sold by the defendants to the plaintiffs. The plaintiffs claimed that the damages recoverable should be related to the highest price prevailing at any time between the date of the breach and the date of the arbitration award. This contention was rejected.
Ackner LJ said: ‘Mr. Rix, in his cross-appeal, argued that the damages recoverable by Iansa in contract should be related to the highest price prevailing at any time between the date of the breach and date of the award. Mr. Justice Mustill rejected this submission and has set out his reasons most fully, which we are happy to adopt. We would, however, venture to suggest that the matter can be put more simply. Iansa, as complainants, must establish what damage they have suffered. Mr. Rix had to accept: (a) That after the date when Iansa could have bought in to cover their loss there was no evidence at all that the fluctuations in the sugar market made the slightest financial difference to them. There was no evidence that they could have sold at the highest price. On the contrary, the reasonable inference was that the goods would have been resold for domestic or other consumption in Chile, (b) Although theoretically Cubazucar was capable of selling the sugar at the highest price, there is no evidence that it did so.
Accordingly, to the plaintiffs’ contention that Cubazucar should not profit from its own wrong comes the simple reply: they have not shown that Cubazucar have done so. We cannot, therefore, see any basis upon which Iansa can seek to achieve a windfall in the form of an extra $1,200 per tonne over and above the price which was prevailing when they should have bought in the market.’
The Court rejected any defence of foreign act of state, primarily because there was no such plea and no proof that the acts were acts of the Chilean government, but secondarily also because, if they were, there ‘seems no compelling reason for judicial restraint or abstention’ in a case ‘where it is clear that the acts relied on were carried out outside the sovereign’s own territory’.
Ackner LJ, Stephenson LJ, Sir Segab Shaw
[1983] 2 Lloyds Rep 171
England and Wales
Appeal fromPlaya Larga (Owners of Cargo Lately Laden on Board) v I Congreso del Partido (Owners) QBD 1978
The trading or commercial activities of states are not protected by state immunity. The basic principle of international law is that all states are equal, the rule is ‘par in parem non habet imperium’. . .

Cited by:
CitedFiona Trust and Holding Corporation and others v Privalov and others CA 24-Jan-2007
The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
FollowedAggeliki Charis Compania Maritima SA v Pagnan SpA The Angelic Grace QBD 1994
The court considered whether a claim for a collision between two ships was governed by an arbitration clause which read ‘all disputes from time to time arising out of this contract shall . . be referred to the arbitrament of two arbitrators carrying . .
FollowedThe Ermoupolis 1990
A claim for the tort of conversion fell within the phrase ‘any dispute arising in any way whatsoever out of this bill of lading’. . .
CitedAspect Contracts (Asbetos) Ltd v Higgins Construction Plc SC 17-Jun-2015
Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire . .
CitedBelhaj and Another v Straw and Others SC 17-Jan-2017
The claimant alleged complicity by the defendant, (now former) Foreign Secretary, in his mistreatment by the US while held in Libya. He also alleged involvement in his unlawful abduction and removal to Libya, from which had had fled for political . .
Appeal fromPlaya Larga (Owners of Cargo Lately Laden on Board) v I Congresso del Partido (Owners) HL 1983
The concept of absolute immunity for a Sovereign adopts a theory of restrictive immunity in so far as it concerns the activities of a State engaging in trade: (Lord Wilberforce) ‘It was argued by the [appellants] that even if the Republic of Cuba . .

These lists may be incomplete.
Updated: 06 March 2021; Ref: scu.248210