Carl Zeiss Stiftung v. Rayner and Keeler Ltd
Rule established
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
- 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.
How to use it in an exam
- 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)."
Source
Source: [1967] 1 AC 853
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.