concurring in Parts I, II and IIIA and dissenting as to Part IIIB.
I concur in the panel’s opinion, except I respectfully dissent from the part holding Palau’s High Court to be subject to restraining orders issued by United States District Courts in limitation proceedings. It is my opinion that the Palauan High Court is the court of a foreign country and, therefore, not bound to apply the limitation of liability statute. Oceanic Steam Navigation Co. v. Mellor (The Titanic), 233 U.S. 718, 732-34, 34 S.Ct. 754, 755-56, 58 L.Ed. 1171 (1914); G. Gilmore & C. Black, The Law of Admiralty, 939 (2d ed. 1975).
The panel holds that the Palauan High Court is not a foreign court and therefore subject to our laws. It bases its decision on Palau’s uncertain political status and also finds the result advisable “as a matter of policy.”
The emphasis on Palau’s political status is misplaced. Palau is part of a group of islands known as Micronesia or “little islands.” Historically, it was one of the islands governed by Japan under a League of Nations mandate. In 1947, the United States entered into a trusteeship agreement with the United Nations to administer Micronesia. Under the terms of the agreement, the United States is required to
foster the development of such political institutions as are suited to the trust territory and shall promote the development of the inhabitants of the trust territory toward self-government or independence, as may be appropriate to the particular circumstances of the trust territory and its peoples and the freely expressed wishes of the peoples concerned; and to this end shall give to the inhabitants of the trust territory a progressively increasing share in the administrative services in the territory; shall develop their participation in government; shall give due recognition to the customs of the. inhabitants in providing a system of law for the territory; and shall take other appropriate measures toward these ends.... Trusteeship Agreement, Article 6(1) (emphasis added).
in connection with a policy review meeting in 1981, the United States announced to the Micronesian government that: (1) the United States desired to promptly move to terminate the United Nations trusteeship on terms satisfactory to itself and to the governments and peoples of Palau, the Marshall Islands and the Federated States of Micronesia; and (2) that of all the available political status options, the United States preferred the status of free association, as set forth in the initialed compact and certain additional subsidiary agreements.1
During the policy review meeting discussions concerning a work plan for the transition took place. As then envisioned, the procedure for the transition involved a plebiscite by the voters of Palau, the Marshall Islands and the Federated States of Micronesia under observation by the United Nations; approval by these governments according to their constitutional processes and approval by both houses of the United States Congress. Upon completion of this approval process, the United States would take up the matter of the termination of the trusteeship with the United Nations.
The plebiscite was accordingly held in 1983 and as the majority acknowledges, the citizens of Palau voted against the proposed compact of free association with the United States. This vote not only demonstrated that Palau would not blindly follow the political course desired by the United States, but also froze the United States into its contractual role of trustee and administrator. Gale v. Andrus, 643 F.2d 826, 830 (D.C.Cir.1980); People of Saipan v. United States Dep’t of the Interior, 502 F.2d 90, 95 (9th Cir.1974), cert. denied, 420 U.S. 1003, 95 S.Ct. 1445, 43 L.Ed.2d 761 (1975). The administrative functions carried out by the United States do not, however, vest this country with sovereignty over Palau. The courts have consistently held that the trust territory of the Pacific Islands, which includes Palau, is not within the sovereignty *604of the United States. See, e.g., Gale, 643 F.2d at 832; McComish v. C.I.R., 580 F.2d 1323, 1330 (9th Cir.1978); Kuhn v. United States, 541 F.Supp. 567, 568 (C.D.Cal.1982); Porter v. United States, 496 F.2d 583, 588 n. 4, 204 Ct.Cl. 355 (1974), cert. denied, 420 U.S. 1004, 95 S.Ct. 1446, 43 L.Ed.2d 761 (1975). The majority’s classification of Palau as “quasi-sovereign” is, therefore, of no aid in determining whether Palau’s High Court is subject to restraining orders issued by Guam’s district court. “Quasi-sovereignty” in the context of Palau means no more than that the island does not carry out all its own administrative functions. Cf. Cobb v. United States, 191 F.2d 604, 607-608 (9th Cir.1951), cert. denied, 342 U.S. 913, 72 S.Ct. 360, 96 L.Ed. 683 (1952).
The majority ignores the statement by a panel of this court that “[njumerous cases establish that the Trust Territory is a foreign country.” McComish v. C.I.R., 580 F.2d at 1330. As the court of a foreign country, Palau is not bound by the restraining order of the Guam district court. The Titanic, 233 U.S. at 732-34, 34 S.Ct. at 755-56.
The exception to this rule is set out in the Trusteeship Agreement for the Former Japanese Mandated Islands, July 18, 1947, 61 Stat. 3301; T.I.A.S. No. 1665 (Trusteeship Agreement). Article 3 of the Trusteeship Agreement provides that the United States “may apply to the trust territory ... such of the laws of the United States as it may deem appropriate to local conditions and requirements.”
Although the High Court is required to apply American common law, 1 Trust Territory Code § 103 (1980), there is no common law to apply in the case at bar. Limitation proceedings are statutory. As the Court in Andrus stated: “Congress must manifest an intent either within the statute or in the legislative history to include the Trust Territory [within the reach of a statute] for it to be covered.” Id. at 834.
The majority recognizes that Congress has not extended the limitation of liability statute to Palau, but holds the statute applicable, because there is no local admiralty rule the High Court could apply. This holding is objectionable for two reasons: First, it usurps a function reserved to Congress and second, it breaches article 6(1) of the Trusteeship Agreement, which, as already noted, provides that the United States shall: “foster the development of such political institutions as are suited to the trust territory and shall promote the development of the inhabitants of the trust territory toward self-government or independence .... ”
The majority finds it inconceivable that the High Court of Palau would apply anything but American limitation of liability law. Even assuming the accuracy of this hyperbole, the decision to apply that law lies with the High Court, not this panel. No question has been raised, as to the competency of the Palau judiciary to proceed with the litigation now before it.
. There are two other options available to Palau: commonwealth status or independence.