Luther v Sagor [1921] King’s Bench Division Court of Appeal

1920 the defendant company bought wood from the USSR, the plaintiff Russian company claimed title to the wood on the ground that it had come from a factory in the USSR owned by it before nationalised by the new USSR. Plaintiff argued that the decree of nationalisation could not be recognised since the governed that issued it was not recognised in the UK [Recognition once established is retroactive in effect to the time the recognised government established itself]

(Judge Roche: If a foreign government, or its sovereignty, is not recognised by the government of this country the Courts of this country either cannot, or at least need not, or ought not, to take notice, or recognise such foreign government or its sovereignty.) Court of Appeal: Letter from the Foreign Office: ‘I am to inform you that His Majesty’s Government recognise the Soviet Government as the de facto Government of Russia’ So a government so recognised can be said to have commenced its existence, the acts of that government must be treated by the courts of this country with all the respect due to the acts of a duly recognised foreign sovereign state.