Civil Air Transport Inc. Central Air Transport Corporation [1953] AC 70

1949, Government of the People’s Republic of China proclaimed itself the Government of China. UK continued to recognise the Nationalist Government as the de jure government of China until 1950. In September 1949, 40 aircraft were flown to Hong Kong by Nationalist employees and were sold to a US company, the defendant. In November 1949 the People’s Government declared the aircrafts to be their property.

Subsequent recognition de jure of a new government as the result of successful insurrection can in certain cases annul a sale of goods by a previous government. Retroactivity of recognition operates to validate acts of a de facto government, which has subsequently become the new de jure government, and not to invalidate acts of the previous de jure government. [Recognition by UK requires the courts to regard as valid not only acts done by the new government after the recognition, but acts done before it was recognised in so far as those acts related to matters under its control at the time when the acts were done]