The Secretary of State to the Ambassador in Cuba ( Braden )
Sir: Receipt is acknowledged of your despatch no. 8058 of October 16, 1944,14 enclosing a copy and translation of a note of October 4, 1944 from the Cuban Minister of State then in office,15 in reply to your communication of September 30, 194416 concerning suggestions made by this Government in relation to settlement of claims of American nationals against Cuba.
With reference to claims of American nationals based upon unsatisfied judgments of Cuban courts and also those for the value of supplies furnished, or services rendered, under contracts, the validity of which is not in dispute, it is noted that the Minister stated that the Government of Cuba “continues to make necessary arrangements for their satisfaction”, and in that connection he made reference to a decree issued August 2, 1944 which, insofar as it related to private claims, “ordered” the payment of a total sum of approximately $148,600 on account of only three of the many outstanding claims of the character under discussion. The action of the Cuban Government in issuing the above-mentioned decree, can hardly be regarded as convincing evidence in support of the Minister’s statement that the government “continues to make necessary arrangements” for the satisfaction of the groups of claims to which he referred. So far as the Department is aware, the Cuban Government has, since the issuance of the decree, taken no effective steps to make payment on account of the three claims involved, much less the payment of the numerous other undisputed claims involving amounts totaling many times the total of the three claims mentioned in the decree.
It is noted that in the Minister’s communication it is stated that claims other than those referred to in the preceding paragraph are “excepted” from the provisions of the Inter-American Arbitration Treaty of 1929,17 to which both the United States and Cuba are parties, and that consequently such claims should be settled in accordance with the procedure prescribed by domestic law. It may be observed that [Page 957] by Article 1 of that treaty the governments obligated themselves to submit to arbitration “all differences of an international character” which may arise and which it has not been possible to adjust by diplomacy. However, by Article 2 there were excepted from the stipulations of the treaty controversies “which are within the domestic jurisdiction of [any of] the Parties to the dispute and are not controlled by international law”.
This Government does not contend that the provisions of the above-mentioned treaty obligates the Cuban Government to agree to submit to arbitration the claims in question. It may be observed, however, that the stipulation in the convention excepting certain classes of cases from compulsory arbitration, as provided for in Article 1, merely constitutes a recognition of the generally accepted principle of international law which requires, as a condition precedent to the establishment of a valid international claim, the exhaustion of such legal remedies as may be available in the tribunals of the state against which the claim is preferred. In that relation reference must be made to another generally accepted principle of international law which dispenses with the requirement of exhausting local remedies when those remedies appear insufficient, illusionary or ineffective in securing adequate redress.
According to the Department’s information several American claimants have exhausted remedies available to them in the courts of Cuba and, despite the fact that they have obtained judgments against the Government of Cuba, that Government has failed to satisfy such judgments, which have now been outstanding over a period of six to twenty years. In view of the failure of the government in that respect to comply with the obligation imposed upon it by international law to give effect to the decisions of its courts, no reason is perceived why all other American claimants, including those possessing undisputed claims, should be required to have their claims reduced to the form of judgments of Cuban courts against the Cuban Government, a procedure which, in the light of the past record, would appear to be ineffective and futile.
Consequently, it is the view of this Government that the Cuban Government is, from the standpoint of international law, hardly in a position to insist that American claimants resort to such procedure as may be provided by Cuban law to reduce their claims to the form of judgments by Cuban courts. Since it appears to be well settled that a state cannot appeal to its domestic legislation as an answer to demands for the fulfillment of international duties, it is also the view of this Government that the Government of Cuba cannot properly seek [Page 958] to avoid its international obligation to make provision for the settlement of claims of American nationals on the basis of the alleged fact that under the laws of Cuba the courts of Cuba are vested with jurisdiction to consider such claims.
In view of the foregoing, it is suggested that you continue your efforts to bring about a satisfactory solution of the claims situation along the lines indicated in the Department’s instruction no. 4506 of September 26, 1944.18 The Department recognizes that the change in administration in the Cuban Government may modify your manner of approach. You are, of course, given complete discretion in this connection. It is recalled that, during his visit to Washington as President-elect, Dr. Grau expressed emphatically the view that the Cuban Government should promptly settle its financial obligations.
Very truly yours,