with whom Mr. Justice Brennan, Mr. Justice Stewart, and Mr. Justice Blackmun join, dissenting.
The act of state doctrine commits the courts of this country not to sit in judgment on the acts of a foreign *716government performed within its own territory.1 Under any realistic view of the facts of this case, the interven-tors' retention of and refusal to return funds paid to them by Dunhill constitute an act of state, and no affirmative recovery by Dunhill can rest on the invalidity of that conduct. The Court of Appeals so concluded, and I would affirm its judgment.
I
As of September 15, 1960, when the Cuban Government “intervened,” or nationalized, five Cuban-owned cigar manufacturers, petitioner Dunhill had received some $148,600 worth of cigars for which it had not yet paid. In the period between intervention and February 1961, Dunhill took delivery of an additional $93,000 worth of shipments. Both the District Court and the Court of Appeals concluded that the intervention was to be given full legal effect with respect to the property of Cuban nationals located in Cuba, and that the interventors were therefore entitled to payment for postintervention shipments. F. Palicio y Compania, S. A. v. Brush, 256 F. Supp. 481, 486-490 (SDNY 1966), aff’d, 375 F. 2d 1011 (CA2), cert. denied sub nom. Brush v. Republic of Cuba, 389 U. S. 830 (1967). It is quite clear that that result was correct, and that it would have been no different had the intervened firms been owned by United States citizens. Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398 (1964).
*717Since the date of intervention, the interventors have taken the position that they were also entitled to receive the amounts due to the intervened firms for preintervention shipments — in the case of Dunhill, $148,600. And throughout this litigation, respondents, the interventors 2 and the Republic of Cuba, have insisted that the act of state doctrine requires our courts to give full legal effect to the intervention decree insofar as it purported to nationalize the accounts receivable of the intervened firms. Both the District Court and the Court of Appeals held, however, that the accounts receivable involved here had their situs in New York, that the act of state doctrine did not apply, and that the attempted confiscation was ineffective. Menendez v. Faber, Coe & Gregg, Inc., 345 F. Supp. 527, 536-540 (SDNY 1972); Menendez v. Saks & Co., 485 F. 2d 1355, 1364-1365 (CA2 1973). In a separate petition for certiorari, which the Court today denies,3 and in the course of its presentation in this case, respondents have pursued their contention that the initial intervention should be recognized as having reached the preintervention accounts receivable. But that is not the respondents’ sole contention, and it is not necessary for us to consider it here. For, as the Court of Appeals recognized, the act of state question took on a wholly different light when Dunhill paid the amount due for preintervention shipments to the interventors in Cuba.4
*718The Court of Appeals held that Dunhill’s claim for return of the monies paid to the interventors for pre-intervention shipments sounds in quasi-contract; it arises, the court observed, not from Dunhill’s contractual obligation to the owners, which is situated in New York, but from the interventors’ receipt, appropriation, and refusal to return the funds, all of which have occurred apart from the contract and in Cuba. If the interventors’ course of conduct is itself an act of state, therefore, there can be no doubt that the act of state doctrine applies.
The interventors have not taken any discrete, overt action for which to claim the status of an act of state. Rather, they have received and long retained the money paid to them for preintervention shipments, and they have ignored Dunhill’s demands for its return. The Court declines to view this course of conduct as reflecting an exercise of sovereign power to retain the funds at issue after they arrived in Cuba, explaining in part:
“No statute, decree, order, or resolution of the Cuban Government itself was offered in evidence indicating that Cuba had repudiated her obligations in general or any class thereof or that she had as a sovereign matter determined to confiscate the amounts due [Dunhill and the other] foreign importers.” Ante, at 695.
I do not understand the Court to suggest, however, that the act of state doctrine can be triggered only by a “statute, decree, order, or resolution” of a foreign government, or that the presence of an act of state can only be demonstrated by some affirmative action by the foreign sovereign. While it is true that an act of state *719generally takes the form of an executive or legislative step formalized in a decree or measure, see, e. g., Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 403-405, n. 7 (1964); Eastern States Petroleum Co. v. Asiatic Petroleum Corp., 28 F. Supp. 279 (SDNY 1939), that is only because duly constituted governments generally act through formal means. When they do not, their acts are no less the acts of a state, and the doctrine, being a practical one, is no less applicable. Thus, in Underhill v. Hernandez, 168 U. S. 250 (1897), where the plaintiff sought recovery for his detention in Venezuela by reason of the then revolutionary forces’ refusal to grant him a passport out of Ciudad Bolivar, the Court held that the act of state doctrine “must necessarily extend to the agents of governments ruling by paramount force as [a] matter of fact.” Id., at 252. The cases of Oetjen v. Central Leather Co., 246 U. S. 297 (1918), and Ricaud v. American Metal Co., 246 U. S. 304 (1918), are further illustrations of the practical approach the Court has always taken in determining whether an act of state is present. In each case the plaintiff claimed title to goods purchased from Mexican sellers but confiscated by generals of the Constitution-alist Carranza forces before delivery to the plaintiffs. The Generals, Villa and Pereyra respectively, had sold the goods to intermediate purchasers for the furtherance of the revolution, and the goods thereafter came into the United States in the possession of the defendant-assignees. The Court held that the seizures in question must be viewed as the action, in time of civil war, of a duly commissioned agent of the prevailing Mexican Government, and could not be subjected to the scrutiny of another sovereign’s courts.
These cases demonstrate not only that an act of state need not be formalized in any particular manner, but also that it need not take the form of active, rather than *720passive, conduct. Had General Villa come accidentally into possession of the hides sought to be replevied in Oetjen, instead of seizing them, and then simply refused the plaintiff's demand for possession, the result could not have been any different. Indeed, so far as the report of the Underhill case reveals, the plaintiff, in seeking recovery for his detention, challenged no more than General Hernandez’ refusal to do anything when he demanded his passport.
That a foreign sovereign has issued no formal decree and performed no “affirmative” act is not fatal, then, to an act of state claim. If the foreign state has exercised a sovereign power either to act or to refrain from acting, there is an act of state. In a case very similar to this one, the New York Court of Appeals held that the Cuban bank’s dishonoring of tax exemption certificates, the redemption of which had been suspended by a decision of the Cuban Currency Stabilization Fund, was an act of state. French v. Banco Nacional de Cuba, 23 N. Y. 2d 46, 242 N. E. 2d 704 (1968). The act of state, the court wrote, “was the defendant’s refusal to perform; the currency regulations, though equally the product of an act of state, were simply the justification for the refusal.” 5
The Court, I take it, does not dispute that a refusal to act constitutes an act of state when shown to reflect the exercise of sovereign power. Rather, the Court finds no exercise of sovereign power to retain the funds at issue after they arrived in Cuba. Refusal to repay, the Court suggests, does not necessarily reflect anything more than the interventora’ initial contention, rejected by the Dis*721trict Court and the Court of Appeals, that the September 15, 1960, intervention decree operated to seize the accounts receivable of the intervened firms. And the Court is unwilling “to infer from the fact that Cuba seized the assets of the cigar business from Cuban nationals that they must necessarily . . . have made a later discriminatory and confiscatory seizure of money belonging to the United States companies.” Ante, at 692 n. 8.
As I have already indicated, however, the respondents’ position has not been, and need not be, limited to the contention that the September 15 decree operated to seize the preintervention accounts receivable. Counsel for the interventors and the Republic of Cuba stated at trial, in his brief to this Court, and again in his oral argument in this Court:
“[U]nder the act of state doctrine the Cuban government, in accepting, expropriating, seizing, nationalizing, whatever other words you want, to take this money, has done so pursuant to a regulation, a law, a decree of the government of Cuba, and therefore the courts of this state will not look into the matter nor will the federal court.
“Now, I am not talking about the extraterritorial effect of an act of state. I am talking about a territorial effect, namely, the seizure or the acceptance or the appropriation of this money when it got down to Cuba. We are not now concerned with whether they expropriated debts on September 15th. The question is what happened on October 1st, and October 15th and on November 8th and December 12th, when the money came down. And at that time the Cuban government took this money and under the act of state doctrine it belongs to the Cuban government.” Tr. 854-856; Brief for Respond*722ents in Reply to Brief for United States as Amicus Curiae 5 n. 3; Tr. of Oral Rearg. 38.
This statement confirms that while Cuba’s retention of and refusal to return the funds once they arrived in Cuba was “pursuant to” the September 15 decree, it was without regard to whether that decree would, in the eyes of a United States court, have entitled the interventors to collect the accounts receivable in the first place.6 And while the Court appears to suggest that Cuba would be more hesitant to seize money belonging to United States companies than it would be to seize property belonging to Cuban nationals, the fact is that in this case Cuba has made known its intent to retain the funds in question even if a United States court declares the funds to have been taken from Dunhill rather than from the former owners. Speaking once again on behalf of his client, the Republic of Cuba, counsel has announced Cuba’s “refusal to acquiesce in the quasi-contractual obligation [to Dunhill] sought to be imposed by a foreign court.” Brief for Respondents in Reply to Brief for United States as Amicus Curiae 5.7
*723The above-quoted statements of counsel are not themselves acts of state. But as authoritative representations of the position of counsel’s clients, the interventors and the Republic of Cuba, with respect to the monies in their possession, these statements do serve to confirm that the continued retention of those monies has been undertaken as an exercise of sovereign power.8
*724II
Mr. Justice White advances a contention, not adopted by the Court, that even if the Cuban Government “had purported to exercise sovereign power to confiscate” the monies at issue, ante, at 695, the act of state doctrine is inapplicable because of the “purely commercial” nature of the confiscation. While I am prompted to make several observations on the suggested rationale for a broad “commercial act” exception to the act of state doctrine, ultimately there is no need to consider whether, and under what circumstances, an exception for commercial acts might be appropriate. It will suffice to say that no such exception is appropriate in this case.
A
I note at the outset that the commercial act exception to the act of state doctrine is supported by the Department of State. In its most recent Bernstein letter,9 the Department has expressed the opinion that the conduct of foreign policy would suffer no embarrassment if the Court declined to apply the act of state doctrine to this case, if it declined to apply the doctrine to commercial cases in general, or, indeed, if it overruled Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398 (1964). Mr. Justice White quite properly does not rely specifically upon the views of the Department; six Members of the Court in First Nat. City Bank v. Banco Nacional de *725Cuba, 406 U. S. 759 (1972) (hereinafter Citibank), disapproved finally the so-called Bernstein exception to the act of state doctrine, thus minimizing the significance of any letter from the Department of State. Id., at 773 (Douglas, J., concurring in result); ibid. (Powell, J., concurring in.judgment); id., at 776-777 (Brennan, J., dissenting). Whether the act of state question in this case is viewed as being confined to a single dispute or as extending to a broad class of disputes, the task of defining the role of the Judiciary is for this Court, not the Executive Branch.10
B
In concluding that the act of state doctrine should not apply to the purely commercial acts of sovereign nations, Mr. Justice White relies heavily upon the widespread acceptance of the “restrictive theory” of sovereign immunity, which declines to extend immunity to foreign governments acting in a “private,” or commercial, capacity. The restrictive theory of sovereign immunity has not been adopted by this Court, but even if we assume that it is the law in this country, it does not follow that there should be a commercial act exception to the act of state doctrine.
It is true, of course, that a particular litigant’s claim may be as effectively defeated by application of the act of state doctrine as by a foreign government’s invocation of sovereign immunity. But the doctrines of sovereign immunity and act of state, while related, differ fundamentally in their focus and in their operation. Sovereign immunity accords a defendant exemption from *726suit by virtue of its status. By contrast, the act of state doctrine exempts no one from the process of the court. Equally applicable whether a sovereign nation is a party or not, the act of state doctrine merely tells a court what law to apply to a case; it “concerns the limits for determining the validity of an otherwise applicable rule of law.” Sabbatino, 376 U. S., at 438.11 In the absence of “unambiguous agreement regarding controlling . . . principles” of international law, id., at 428, the act of state doctrine commands that the acts of a sovereign nation committed in its own territory be accorded presumptive validity.
The act of state doctrine, “ ‘although it shares with the immunity doctrine a respect for sovereign states,’ serves important policies entirely independent of that rule.” Citibank, supra, at 795 (Brennan-, J., dissenting), quoting Sabbatino, supra, at 438. The act of state doctrine is not mandated by the text of the Constitution, but it does have “ ‘constitutional’ underpinnings.” Sabbatino, supra, at 423.
“It arises out of the basic relationships between branches of government in a system of separation of powers. It concerns the competency of dissimilar institutions to make and implement particular kinds of decisions in the area of international relations. The doctrine as formulated in past decisions expresses the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder rather than further this country’s pursuit of goals both for itself and *727for the community of nations as a whole in the international sphere.” Ibid.12
As Me. Justice Brennan has observed, the act of state doctrine reflects the notion that the validity of an act of a foreign sovereign is, under some circumstances, a “political question” not cognizable in our courts. The circumstances indicating the existence of a “political question” in Sabbatino included, as Me. Justice Beennan summarized, “the absence of consensus on the applicable international rules, the unavailability of standards from a treaty or other agreement, the existence and recognition of the Cuban Government, the sensitivity of the issues to national concerns, and the power of the Executive alone to effect a fair remedy for all United States *728citizens who have been harmed.” Citibank, supra, at 788; see Sabbatino, supra, at 427-437.
The doctrine of sovereign immunity, concerned only with the status of a party to a lawsuit, does not focus on the other circumstances just mentioned; it is simply not designed to be responsive to the particular considerations underlying the act of state doctrine. Whatever exceptions there may be to sovereign immunity ought not be transferred automatically, therefore, to the act of state doctrine.13
C
I question the wisdom of attempting the articulation of any broad exception to the act of state doctrine within the confines of a single case. The Court in Sabbatino, aware of the variety of situations presenting act of state questions and the complexity of the relevant considerations, eschewed any inflexible rule in favor of a case-by-case approach. 376 U. S., at 428. The carving out of broad exceptions to the doctrine is fundamentally at odds with the careful case-by-case approach adopted in Sabbatino.
Indeed, it is difficult to discern the precise scope of the “commercial act” exception contemplated by Mr. Justice White.14 In the final analysis, however, it is un*729necessary to consider whether the exception would be responsive to the concerns underlying the act of state doctrine in every case to which it might apply.15 If the exception covers this case, it is unresponsive.
Cuba’s retention of and refusal to repay the funds at issue in this case took place against the background of the intervention, or nationalization, of the businesses and assets of five cigar manufacturers. As I have already indicated, the seizure and retention of the Dunhill funds were pursuant to the initial intervention decree. For all practical purposes, the seizure of the funds once they arrived in Cuba is indistinguishable from the seizure of the remainder of the cigar manufacturers’ businesses. The seizure of the funds, like the initial seizures on September 15, reflected a purpose to exert sovereign power to its territorial limits in order to effectuate the intervention of ongoing cigar manufacturing businesses. It matters not that the funds have been determined by a United States court in this case to have belonged to Dunhill rather than the cigar manufacturers. What does matter is that Cuba retained the money in the course of its program of expropriating what it viewed as part and parcel of the businesses.16
The applicability of the act of state doctrine in these circumstances is controlled by Sabbatino itself. As the Court there noted: “There are few if any issues in inter*730national law today on which opinion seems to be so divided as the limitations on a state’s power to expropriate the property of aliens.” 376 U. S., at 428.' Indeed, the absence of any suggestion that Cuba’s intervention program was discriminatory against United States citizens 17 renders the lack of consensus as to applicable principles of law even more apparent here than in Sabbatino. See Citibank, at 785 (Brennan, J., dissenting). And unless one takes the position that the amount of money or the value of property seized materially affects the sensitivity of the issues, we are guided in this case by the following observation in Sabbatino:
“It is difficult to imagine the courts of this country embarking on adjudication in an area which touches more sensitively the practical and ideological goals of the various members of the community of nations.” 376 U. S., at 430 (footnote omitted).
Regardless, then, of whether the presence of consensus as to controlling legal principles, or any other circumstances, would render the act of state doctrine inapplicable to some, or even most, acts that could be characterized as “purely commercial,” the doctrine is fully applicable in this case.
Ill
Since in my view the retention of and refusal to repay the funds at issue constitute an act of state that would ordinarily preclude an affirmative judgment against Cuba and the interventors, it is necessary for me to proceed to *731the second question on which we granted certiorari— whether Dunhill may nonetheless secure an affirmative judgment in the peculiar circumstances of this case.
A
A brief recapitulation of the facts is necessary to understand Dunhill’s contention that it is entitled to an affirmative recovery in spite of the presence of an act of state. Dunhill was one of three importers that had at the time of the intervention received cigars for which it had not yet paid. During the three months following intervention, each of the importers paid the interventors the amounts due for preintervention shipments. And in the period between intervention and February 1961, each of the importers took delivery of additional shipments, for which payment was not made.
This suit stems from nine suits brought against the importers by the former owners of the five intervened firms, inter alia, to restrain payment to anyone else for goods manufactured by their firms or bearing their mark, and to recover for all such goods that the importers had already received. The interventors brought suit in the names of the intervened firms to enjoin the former owners’ counsel from pursuing the nine actions in the firms’ names, and to substitute their own attorneys for those of the former owners in the same nine suits. The District Court ruled as a preliminary matter that the interventors and not the former owners were entitled to sue for payment for the postintervention shipments. F. Palicio y Compania, S. A. v. Brush, 256 F. Supp. 481 (SDNY 1966), aff’d, 375 F. 2d 1011 (CA2), cert. denied sub nom. Brush v. Republic of Cuba, 389 U. S. 830 (1967). The original nine actions were then consolidated for trial, with the interventors pursuing their claim for payments for post-intervention shipments, and both the former owners and the interventors pursuing their claims to the payments for preintervention shipments.
*732The District Court concluded that the former owners, not the interventors, were entitled to payment for pre-intervention shipments. Under its view that the inter-ventora’ refusal to return the monies paid for preinter-vention shipments did not involve an act of state, the District Court set off that amount ($477,000) against the amount owed by the importers to the interventors for postintervention shipments ($700,000). Menendez v. Faber, Coe & Gregg, Inc., 345 F. Supp. 527 (SDNY 1972). Alone among the importers, Dunhill had paid the interventors more for preintervention shipments ($148,000) than it owed for postintervention shipments ($93,000). Accordingly the District Court directed that an “affirmative judgment” be entered in Dunhill’s favor.18
The Court of Appeals found an act of state in Cuba’s retention of the monies paid for preintervention shipments. It interpreted the various views expressed in Citibank as indicating that this Court would nevertheless uphold the importers’ counterclaims up to the limits of the respective claims asserted against them by the in-terventors. But the court reversed the judgment of the District Court insofar as it granted Dunhill affirmative recovery. Menendez v. Saks & Co., 485 F. 2d 1355 (CA2 1973). The second question on which we granted certiorari is whether, if Cuba’s conduct constitutes an act of state, Dunhill may nonetheless assert its full counterclaim in the circumstances of this case, where the counterclaim exceeds Cuba’s claim against it but is less than the amount owed to Cuba by the importers as a group.
B
The Court in Citibank held that the act of state doc*733trine does not necessarily bar a defendant from litigating the merits of a limited counterclaim against a foreign state suing in the courts of this country. Petitioner there was an American bank whose branches in Cuba had been nationalized. The bank responded by selling the collateral securing its loan of $10 million to the respondent Banco Nacional de Cuba, an instrumentality of the state. Banco Nacional then sued for the excess proceeds realized from the sale, and First National counterclaimed for an equal amount in damages resulting from the expropriation of its property. For various reasons asserted in three separate opinions, a bare majority of the Court allowed prosecution of the counterclaim, limited as it was to the amount recoverable against First National.
Because we are concerned here only with the status of a counterclaim in excess of a foreign state’s principal claim, the precise question the Court addressed in Citibank — whether a counterclaim limited by the amount of the foreign state’s claim may be barred by the act of state doctrine — does not cover the present situation.19 The approach adopted in Me. Justice Brennan’s dissent in Citibank, which would have barred a counterclaim limited by the amount of a foreign state’s claim, would be sufficient, a fortiori, to bar Dunhill’s excessive counterclaim. But even putting that approach aside, the judgment of the Court of Appeals denying affirmative relief to Dunhill should be affirmed.
An affirmative judgment for the excess of a counterclaim over a foreign state’s principal claim is indistinguishable in any important respect from an ordinary affirmative judgment. In this case, the situation is precisely as it would be if Cuba had voluntarily recognized the validity of Dunhill’s claim in an amount equal to its *734own, the parties had agreed extra judicially to consider the claims as canceling each other out pro tanto, and Dunhill had then sued Cuba for the unsettled remainder of its claim. The courts would then be presented with an unadorned suit against a foreign sovereign, barred by the act of state doctrine.20 But an affirmative judgment offends the policy of judicial abstention from interference in international relations to an equal degree, whether it is founded upon a naked suit against a foreign state or an excessive counterclaim.21
Dunhill contends, however, that the nature of the act of state question is affected by the fortuity that its counterclaim, while exceeding Cuba’s principal claim against it, is for a lesser amount than the sum of the judgments entered in favor of Cuba against the three *735importers whose eases were consolidated for trial. This contention suffers from two fatal flaws.
First, the actions against Dunhill and the other importers were not merged; they were simply consolidated for trial in the interest of economy.22 The inter-ventors, as substituted plaintiffs in the actions originally filed by the owners, asserted separate causes of action against each importer; no single transaction involved or gave rise to a claim against more than one importer. The actions thus did not lose their separate identities because of the consolidation.23 In these circumstances, a ruling allowing for a counterclaim on the theory that it does not exceed the foreign state's total judgments against those parties that happen to be before the District Court would be capricious indeed. The limitation on counterclaims would then be determined by the presence or absence of actions suitable for consolidation at a particular time in a particular court,24 and upon their outcomes.
In any event it has become quite clear that execution of Dunhill’s affirmative judgment against the judgment debts that the other importers owe to the interventors would be prohibited by the Cuban Assets Control Regulations, 31 CFR pt. 515 (1975), promulgated by the Treasury Department's Office of Foreign Assets Control pursuant to the Trading With the Enemy Act, 50 U. S. C. *736App. § 5. The regulations prohibit, except as authorized by the Secretary, all transactions involving property in which Cuba has an interest, direct or indirect, including “the levy of or under any judgment, decree, attachment, execution, or other judicial or administrative process or order.”25 This scheme by which the Executive has frozen Cuban assets in the United States is designed to preserve a fund for the ultimate, orderly satisfaction of claims against Cuba by American nationals if diplomatic alternatives prove unavailing. See Citibank, 406 U. S., at 794 (Brennan, J., dissenting). In furtherance of this policy, the Treasury Department has stated that it will refuse “to authorize a judgment creditor of Cuba to execute against assets of Cuba which have been frozen” under the regulations.26 An affirmative judgment in *737favor of Dunhill could not, therefore, be satisfied out of the other importers’ judgment debts to Cuba, which are frozen for the benefit of all creditors or for such other disposition as future diplomatic negotiations direct.27 To allow entry of an affirmative judgment against Cuba in these 0 circumstances would thus mark a significant departure from our consistent policy of avoiding potential interference with the executive channels through which our Nation deals with others, while securing to Dunhill only the very speculative prospect of obtaining a preference over other United States claimants should national policy on the subject of Cuban assets change in the future.
IV
In conclusion, I would hold that the course of conduct undertaken by the interventors with respect to payments made for preintervention shipments constitutes an act of state, and that Dunhill is not entitled to an affirmative judgment on its counterclaim relating to those payments. I would affirm the judgment of the Court of Appeals.
The classic American formulation of the doctrine, see Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 416 (1964), appears in Underhill v. Hernandez, 168 U. S. 250, 252 (1897):
“Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.”
Actually only one of the interventors is a party in this Court; he has apparently been designated as the single interventor for the five intervened tobacco companies. For the sake of convenience, I shall continue to refer to “the interventors.”
Republic of Cuba v. Saks & Co., No. 73-1287, post, p. 991.
Payment was made to collecting banks that had previously acted as agents for the former owners. The District Court expressly found that “the importers [including Dunhill] well knew that, following intervention, the collecting banks were acting as agents for the interventors and not the [former] owners, and also *718knew that the payments they were making to the collecting banks were ultimately received by the interventors in Cuba.” 345 F. Supp., at 542. These findings were sustained by the Court of Appeals. 485 F. 2d, at 1367-1368.
The quoted statement appears in the concurring opinion of Judge Hopkins, 23 N. Y. 2d, at 66, 242 N. E. 2d, at 717, which was joined by the same majority that subscribed to the opinion of Chief Judge Fuld, in which the court held: “[T]he breach of contract, of which the plaintiff complains, resulted from, and, indeed, itself constitutes, an act of state.” Id., at 53, 242 N. E. 2d, at 709.
In another brief filed in this Court, respondents’ counsel observed:
“It matters not that the interventor may be wrong in the eyes of the United States court [in claiming that the September 15 decree nationalized the preintervention accounts receivable]. . . . Since the monies taken by the interventor were in Cuba, and he was a representative of the sovereign, it can hardly be denied that his conduct amounted to 'a taking of property within its own territory by a foreign sovereign government.’ [Banco Nacional de Cuba v. Sabbatino, 376 U. S., at 428.]” Brief for Respondents 18.
The Court acknowledges that this statement reflects an alternative contention by respondents that, assuming the ineffectiveness of the September 15 decree in reaching the preintervention accounts receivable and the existence of a quasi-contractual obligation to return the monies at issue to Dunhill, their repudiation of that obli*723gation was an act of state. Ante, at 692 n. 8. But the Court emphasizes the fact that respondents have not admitted the existence of an obligation to Dunhill, and concludes that it remains unclear whether respondents have determined to retain the monies even if a United States court declares the obligation to exist. The very fact that respondents are making the alternative argument referred to herein, however, should remove any doubt as to their intentions.
Compania Espanola de Navegacion Maritima v. The Navemar, 303 U. S. 68 (1938), is not to the contrary. That was a suit in admiralty by the alleged owner of a Spanish merchant vessel to recover possession. The Spanish Ambassador sought leave to intervene as a claimant and produced an “affidavit of the Spanish Acting Consul General suggesting that when the suit was brought the vessel was the property of the Republic of Spain, by virtue of a decree of attachment promulgated by the President of the Republic, appropriating the vessel to the public use, and that it was then in the possession of the Spanish Government.” Id., at 70. The District Court, we held, “was not bound ... to accept the allegations of the suggestion as conclusive” on the question of possession, id., at 75, where there was no proof whatever that the foreign sovereign had ever held possession and no claim that “the alleged seizure [of the vessel] by the members of the crew was an act of or in behalf of the Spanish Government.” Id., at 72.
By contrast, in the present case it is settled that the interventors received the payments for preintervention shipments on behalf of the Cuban Government, Menendez v. Faber, Coe & Gregg Inc., 345 F. Supp., at 532, and any lingering doubt that their retention was by virtue of a claim of right was dispelled by counsel for Cuba and the interventors at trial. Had possession been established in The Navemar, and the decree of appropriation been in doubt, the case would be in point, but in fact the contrary was true and the case is inapposite.
It was in response to the suggestion that The Navemar case con*724trolled this one that counsel for respondents made the statement, relied upon by the Court, ante, at 692 n. 8: “The statement of an ambassador, like the statement of a lawyer, is not proof of anything. It is merely an assertion made by the representative of a sovereign as to the position taken by that sovereign in litigation.” Brief for Respondent 17 n. 8. In this case, unlike in The Navemar case, it is precisely the position of the foreign sovereign with respect to property in its possession that is significant.
The appellation “Bernstein letter” stems from the case Bernstein v. N. V. Nederlandsche-Amerikaansche, 210 F. 2d 375 (CA2 1954).
It is noteworthy that while the Department of State now takes the position that Sabbatino can be overruled without embarrassment to the conduct of foreign policy, the result in Sabbatino had been urged by the Solicitor General at the time. See Brief for United States as Amicus Curiae in Sabbatino, O. T. 1963, No. 16.
See also R. Falk, The Role of Domestic Courts in the International Legal Order 96-102 (1964); Henkin, Act of State Today: Recollections in Tranquility, 6 Col. J. Transnat'l L. 175, 178-180, 187-188 (1967).
While Sabbatino found the act of state doctrine to reflect the “distribution of functions between the judicial and political branches of the Government,” 376 U. S., at 427-428, it has also been suggested that a doctrine of deference based upon the absence of consensus as to controlling principles of international law allocates legal competence among nations in a manner that promotes the growth of international law. See generally R. Falk, The Status of Law in International Society 403-442 (1970); R. Falk, The Role of Domestic Courts in the International Legal Order 64r-138 (1964). Whether considerations of its contribution to the development of international law provide a basis for the act of state doctrine independent of the notion of separation of powers is a question that the Court has not addressed and that we need not consider. It is worth noting, however, that the Sabbatino Court was sensitive to the fact that a court's invalidation of a foreign sovereign's acts on the basis of principles of international law that are not the subject of “unambiguous agreement,” 376 U. S., at 428, is unlikely to be regarded as impartial. Id., at 434^-435. In the area of state responsibility for expropriations, the Court viewed the potential contribution of United States courts to the growth of international law as “highly conjectural,” id., at 434, and concluded that “progress toward the goal of establishing the rule of law among nations [is] best served by maintaining intact the act of state doctrine.” Id., at 437.
At least one commentator has proposed discarding the doctrine of sovereign immunity (except with respect to diplomatic and military activity), while retaining the nonreviewability accorded by the act of state doctrine to official acts of a sovereign performed within its territory. R. Falk, The Role of Domestic Courts in the International Legal Order 139-145, 164-169 (1964).
The precise contours of the restrictive theory of sovereign immunity, on which the commercial act exception is based, are themselves unclear. See, e. g., Victory Transport, Inc. v. Comisaria General, 336 F. 2d 354, 359-360 (CA2 1964); Falk, The Immunity of Foreign Sovereigns in U. S. Courts — Proposed Legislation, 6 N. Y. U. J. Int’l L. & Pol. 473, 477 (1973); Lauterpacht, The Problem of Jurisdictional Immunities of Foreign States, 28 Brit. Y. B. of Int’l L. 220, 222-226 (1951).
The general observation that “more discernible rules of international law have emerged with regard to the commercial dealings of private parties in the international market” than with regard to “exercises of governmental powers,” ante, at 704, does not, however, approach the finding of “unambiguous agreement regarding controlling legal principles” contemplated by Sabbatino. 376 U. S., at 428.
Quite apart from the significance that may be attached to the label, I find it difficult to accept Mr. Justice White’s characterization of the course of conduct involved here as "purely commercial.”
Under its view of the case as a run-of-the-mill commercial case, Dunhill does assert that the retention of the monies constitutes a discriminatory taking — the notion evidently being that Cuba has not generally repudiated its commercial debts. Supplemental Brief for Petitioner 15-17. But there has been no claim that Cuba has retained only those preintervention-shipment payments made by United States citizens, or that the intervention program was in any other sense discriminatory.
This was done by entry of judgment for the interventors against Dunhill for $93,000 and in favor of Dunhill against the interventors for $148,000.
Whether Citibank’s approval of a setoff is applicable to the facts of this litigation is questioned in the petition in Republic of Cuba v. Saks & Co., No. 73-1287.
The bar of sovereign immunity, which yields to the extent of a counterclaim against a sovereign plaintiff and no further, National City Bank v. Republic of China, 348 U. S. 356 (1955), would be absolute quite apart from the availability of the act of state defense, unless the restrictive theory of sovereign immunity is followed and the case is considered purely commercial.
When this case was initially briefed and argued, Dunhill attempted to distinguish an excessive counterclaim from a simple principal claim on the ground that the former was covered by the Bernstein letter in Citibank, in which the State Department advised the Court that foreign policy considerations did not require application of the act of state doctrine "to bar consideration of a defendant's counterclaim ... in [that] or like cases.” 406 U. S., at 764. The letter in Citibank provided little support for Dunhill, since it contained several qualifications to its determination that the act of state doctrine need not be applied, one of which was that “the amount of the relief to be granted is limited to the amount of the foreign state's claim.” Banco Nacional de Cuba v. First Nat. City Bank, 442 F. 2d 530, 537 (CA2 1971). Since the State Department has now made known its view that the act of state doctrine need not be applied in this case, it is no longer necessary for Dunhill to rely on the letter in Citibank. But, as I have already noted, the significance of any views expressed by the State Department is minimal after Citibank.
“[C]onsolidation is permitted as a matter of convenience and economy in administration, but does not merge the suits into a single cause, or change the rights of the parties, or make those who are parties in one suit parties in another.” Johnson v. Manhattan R. Co., 289 U. S. 479, 496-497 (1933) (footnote omitted).
See 9 C. Wright & A. Miller, Federal Practice and Procedure §2382, pp. 254-256 (1971).
We are informed that the interventors had pending at least four other cases against tobacco importers in the District Court at the time the present cases were tried. See Brief for Respondents 26. The reason they were not consolidated with the present case is not a matter of record here.
Title 31 CFR § 515.201 (b) (1975) prohibits all transactions and transfers that “involve property in which [Cuba], or any national thereof, has at any time on or since [July 8, 1963] had any interest of any nature whatsoever, direct or indirect.” “Transfer” is defined to mean any act or transaction the purpose, intent, or effect of which is to “create, surrender, release, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property,” including execution of a judgment. § 515.310. Property is defined to include a judgment. § 515.311. Discharge of a judgment debt on behalf of Cuba, even if by execution of a judgment against Cuba, would thus be prohibited.
After certiorari was granted in this case, counsel for respondents corresponded with the Acting Director of the Office of Foreign Assets Control, stating:
“Dunhill had assumed that if it secured a judgment against Cuba, it could execute that judgment against money owing to Cuba from other creditors and it had in fact attempted to attach funds owing to Cuba by Faber, Coe & Gregg, another cigar importer whose claim is likewise in litigation. . . .
“It would be helpful if you would confirm my understanding that, generally speaking, you will not issue a license to permit a judgment-creditor of Cuba to execute against assets of Cuba which have been frozen pursuant to the Foreign Assets Control regulations. . . .”
The Acting Director responded by a letter confirming this under*737standing of the licensing policy. Both letters appear in Brief for Respondents, App. B.
Execution of an affirmative judgment would, of course, be barred whether the basis for that judgment was the presence of other parties with judgment debts to Cuba, the absence of a sovereign act, or the application of a commercial act exception to the act of state doctrine. The point is particularly appropriate, however, in response to the contention that the presence of other parties with judgment debts to Cuba justifies an affirmative judgment in this case; this contention proceeds on the assumption that the policies behind the act of state doctrine would otherwise bar affirmative recovery by Dunhill, and permits affirmative recovery only because of the purported unfairness that would result if Cuba’s debt to Dunhill were not deducted from its recovery from the other importers. As has been shown, granting an affirmative judgment to Dunhill in this way would not affect the fairness of the disposition, since execution of the judgment would be barred by the Treasury Department’s freezing of Cuban assets for the benefit of all American nationals with claims against Cuba.