Walter Upright v.

Mercury
Business Machines
Penned by Justice Breitel (Aptril Subjects
of International Law
This case involves the issue of:

1 Unrecognized Government

2 Capacity of the plaintiff to sue before the US Court

Effect that the recognition of a government might conflict with executive

3 nonrecognition

4 De Facto Principle
Unrecognized Government

a state or government which does not enjoy diplomatic

recognition. It has probably claimed statehood
but lacked jurisdiction from at least one of its states.

- the Status of East German territory was once

belligerent.
Parties
Walter Upright
Plaintiff
American citizen and resident of New
York
Parties
Mercury Business Machines Co.
Defendant
New York Corporation which accepted and
drew trade acceptance in favor of Plaintiff
Walter Upright

Polygraph Expert GmbH

Defendant
Situated in the Soviet Sector of Berlin;
a state controlled enterprise of the so-
called German Democratic Republic.
Its main office is in East Berlin.
 FACTS
• Plaintiff sues as the assignee
of a trade acceptance drawn
on and accepted by defendant
Mercury in payment for business
typewriters sold and delivered to
it by Polygraph Export GmbH.

• Defendant's counsel has been advised that Polygraph was a

state-controlled enterprise of the so-called German Democratic Republic.
 FACTS

• But it appears that it is not a

West German corporation but rather
an East German corporation

• Defendant argues that:

- Plaintiff lacked capacity to sue since

German Democratic Republic was not
recognized by the US Government.
 FACTS

• - It is an instrumentality of the
government

- Upright, as its assignee, has no

greater right to maintain the action
than his assignor
 FACTS

• TC
- Defendant's defense was valid;

- An unrecognized government could

not sue

- The assignment to Upright violated

public policy and barred him from
suing on the obligation
 Issues

- Whether or not the trial court erred in ruling that Upright could not sue based
solely on unrecognition; or whether or not plaintiff could bring a suit against the
defendant;

- Whether or not the transaction entered into was illegal or violative of public
policy
 Ruling
1. Yes.

The political decision not to recognize a government does not deprive it of

a juridically cognizable de facto existence.

Since nonrecognition itself neither prevents private transactions nor bars

the courts from considering them, such transactions are unenforceable
only if they violate a public policy.

The defendant, however, had not alleged that its transactions with the East
German Corporation was illegal or violative of public policy.
 Ruling
2. No.

It was stated that the typewriters had been "shipped openly and passed
regularly through US Customs", defendant was obviously hard put to find a
policy that forbade suit or recovery against him if the transaction was both
permitted and facilitated by the federal government, without alleging such
policy, however, he could not prevail.

Polygraph GmbH is situated in the Soviet Sector of Berlin and is a state co

ntrolled enterprise of the so-called German Democratic Republic (GDR). Its
main office is in East Berlin.
Thank you