1

Bank of Ethiopia V. National Bank of Egypt and Liguori 1937

FACT: The Italian decree issued after the occupation of Addis Ababa in
1936 aimed at the dissolution of the Ethiopian Bank. The bank requested
certain accounts and orders from the Egyptian National Bank and the
liquidator appointed under the Italian decree
ISSUE: Whether the Ethiopian bank has been dissolved, or whether it no
longer exists; if not, whether it has authorised the filing of a lawsuit.
DECISION: Ruling that the Ethiopian bank has been dissolved by an
Italian decree, which has the power to take such action. The Italian
government is the de facto government and has complete control over
the occupied territories and therefore has full government control over
that territory.
2
An Italian decree promulgated after the capture of Addis Ababa in 1936
purported to dissolve the Bank of Ethiopia. That bank claimed certain
accounts and orders against the National Bank of Egypt and against the
liquidator appointed under the Italian decree, and an issue was directed
to be tried whether the Bank of Ethiopia had been dissolved or had
otherwise ceased to exist, and, if not, whether it had authorized the
bringing of the action. Held, (1) That the Bank of Ethiopia had been
dissolved by the Italian decree, which was the act of a de facto
government in entire control of the territory occupied and therefore
having complete governmental control over that territory. (2) That the
action, having been brought otherwise than by the liquidator's authority,
had not been authorized by the Bank of Ethiopia. Sembl&j that all the
acts of a de facto government have the status of acts of a fully
responsible Government.
3
As soon as the de facto recognition is given, the Government acquires
sovereign immunity from being sued in the courts of a foreign State
which so recognizes it. It does not matter in such cases, whether de
facto or de jure recognition is given, because a de facto recognition
dates back in the same manner as a de jure recognition. This rule has
been applied in a number of cases viz. Bank of Ethiopia v. National Bank
of Egypt & Ligouri (1937) 3 All ER 8. The Arantzanu Mendi (1939) 1 All ER
719. So far as conflict of authority takes place between a displaced de
jure government and a newly recognized de facto government,
concerning matters in the territory ruled by the de facto government,
the rights and status of de facto government will prevail.