RecognitionAgency theoryHouse of Lords

Carl Zeiss Stiftung v Rayner and Keeler Ltd

[1967] 1 Appeal Cases 85319671 min read
The case in brief30-second read
Facts
Carl Zeiss Stiftung in Jena (East Germany) claimed to be the true foundation. Filed suit in English courts. UK did not recognise the GDR (East German government)
Issue
Whether English courts can give effect to acts of an unrecognised government.
Held
Acts of the GDR could be recognised as acts of a subordinate body acting on behalf of the USSR.
Principle
Courts may recognise the acts of an unrecognised government as valid if that government acts as a subordinate or agent of a recognised sovereign state. The "agency theory" allows circumventing non-recognition where practical necessity demands.

Facts

  • Carl Zeiss Stiftung in Jena (East Germany) claimed to be the true foundation
  • Filed suit in English courts
  • UK did not recognise the GDR (East German government)
  • Without recognition, its laws and acts (including reconstituting the foundation) had no effect in English courts

Issue

  1. Whether English courts can give effect to acts of an unrecognised government.

Held

  • Acts of the GDR could be recognised as acts of a subordinate body acting on behalf of the USSR
  • The USSR was recognised as having de jure sovereignty over the territory
  • GDR treated as an agent of the USSR for legal purposes
  • Foundation's standing recognised

Ratio decidendi

Where a recognised sovereign state exercises authority over a territory through a subordinate body (even if that body is not itself recognised as a government), the acts of that subordinate body may be given legal effect as acts done on behalf of the recognised sovereign.

Exam use

How to use it in an answer

  • Agency theory as workaround for non-recognition
  • Evolution from Luther v. Sagor's strict approach
  • Key line: "In Carl Zeiss Stiftung v. Rayner (1967), the House of Lords held that acts of an unrecognised government can be given effect if treated as acts done on behalf of a recognised sovereign state (agency theory)."

Cite this

Citation

Carl Zeiss Stiftung v. Rayner and Keeler Ltd [1967] 1 Appeal Cases 853

Reported: [1967] 1 AC 853. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.