International business transactions

Menendez v. Saks and Co. (2

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OUTLINE International Business Transactions

Menendez v. Saks and Co. (2^nd Cir. 1973)

A Cuban currency regulation required all exporters who rec’d payments in a foreign currency to deliver the currency within three days to Cuban Currency Stabilization Fund for exchange into pesos.
- another example of currency exchange regulation
Castro expropriates leading cigar export companies without compensation. Cuban shareholders fled to US and bring suit against importers for sums due for shipments made.
Under terms of contract between Cuban cigar co and American importer, payment is made in US dollars not Cuban pesos. Payment to be made either to the Cuban exporter, to a NY bank acting as the exporter’s collecting agent, or to the order of the Cuban exporter and/or the NY collecting bank.
(“payable to the order of” means that person to whom the check is payable may endorse the check and order payment to be made to someone else)
- Govt said Cuban shareholders in US don’t get money for two reasons.
  - Court should reject arguments and have American companies pay US dollars to Cuban company through Cuban central bank and not to shareholders.
  - law applicable to contract is Cuban law and Cuban law says Cuban company, not shareholders have right to money

simple choice of law question
- Cuban govt owns the company now and the shareholders don’t have anything to do with the company anymore
  - Act of state argument, which is essentially a choice of law issue
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