Soviet Distillery in Austria Case
| Jurisdiction | Austria |
| Date | 13 Enero 1954 |
| Court | Administrative Court (Austria) |
Jurisdiction — Exemptions from — Foreign States — Acta jure gestionis — Infringement of Local Legislation — Whether Goods Subject of Infringement and Owned by Foreign State Liable to Confiscation.
The Facts.—Large quantities of spirits produced in a distillery under the management of the Soviet army of occupation in Austria found their way from the Soviet Zone of Occupation (in Austria) into the British Zone of Occupation, where they were confiscated in pursuance of an Austrian Law which provided that spirits not delivered to the competent Austrian authorities administering the State monopoly in spirits were subject to confiscation. It was found
as a fact that an employee of the Soviet distillery had stolen the spirits, and that an intermediary had taken them to the British Zone of Occupation with a view to selling them there. The Soviet authorities appealed against the confiscation, contending—as far as here material—that property owned by the Soviet Union, a foreign State, was not liable to confiscation. The Austrian authority which had confiscated the spirits contended that the spirits were goods which had come into existence as a result of and in connection with the commercial—as distinct from the sovereign—activities of the Soviet Union, and that the confiscation was therefore lawfulHeld: that, just as there was no generally recognized rule of international law which exempted foreign States from the jurisdiction of the local courts in so far as their commercial activities were concerned, so there was no rule which exempted from confiscation property owned by a foreign State which had come into existence as a result of the commercial activities of that State; but that, as on the facts the Soviet authorities had not been given sufficient opportunity to prove that the spirits had been stolen without any negligence on their part, the proceedings were defective, and accordingly the order confiscating the spirits must be quashed.
The Court said: “The complainant contends that by reason of its exterritoriality the confiscation lacks validity. Exterritoriality is a concept of international law, and the generally recognized rules of international law are, according to Article 9 of the Constitution, an integral part of federal law. It is true that according to the generally recognized rules of international law foreign States are not subject to the jurisdiction of the local courts or...
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