Compañía Arenera del Rio San Juan SA (the plaintiff) claimed damages against the Republic of Uruguay and Francisco De Castro, the master of a Uruguay State-owned warship, the ROU Rio Negro. The plaintiff was the owner of the Pato Bragado. This ship was detained in Argentinian territorial waters by the warship and conducted to a port in Uruguay. The ship was charged for illegal extraction of material from the seabed in Uruguay. The ship was detained and excluded from conducting commercial operations for seven months. After three years of litigation, the charges were found to be meritless.

Uruguay invoked the right of State immunity. The plaintiff then dropped its claim against the Uruguay State, but continued its proceedings against the master. Uruguay defended the master, invoking the doctrine of immunity of States and their agents under the International Convention for the Unification of Certain Rules Concerning the Immunity of State-Owned Ships 1926 (the Immunity of State-Owned Ships Convention 1926). This Convention establishes that a warship, its officers, and its crew members, are exempted from the jurisdiction of any State other than its own, even when they are in the territorial waters of other States and have caused legal claims for acts allegedly performed by them. The defendant, as the master of a warship, and as an agent of the Uruguayan State executing acts of Governmental service, was immune from Argentinian jurisdiction, unless Uruguay expressly waived that immunity. The plaintiff alleged that the fact that the defendant did not appear in the proceedings, despite having been served, meant that an extensive interpretation of the international law rules should not be adopted in this case, especially as the defendant had not contradicted the fact that the acts that caused the claim occurred in Argentinian territorial waters.

The first instance Court admitted the State immunity defence and dismissed the claim. The Court of Appeal affirmed this decision, stating that, in principle, foreign warships, their cargo, and the persons onboard, are subject to the jurisdiction of the flag State, and are exempted from all acts of the local State authorities (art 3 of the Immunity of State-Owned Ships Convention 1926). The defendant was attributed liability for acts carried out in the course of surveillance services assigned to the warship under his command, and the Republic of Uruguay classified this conduct as an act of Governmental service. The plaintiff must thus file this claim before the courts of Uruguay. The plaintiff recurred before the Supreme Court (SC), alleging that the decision was grounded on the sole qualification of a foreign State asserting that the act causing the claims was an act of Governmental service, even when executed within Argentinian territorial waters.

Held: The SC affirmed the decision.

The SC adopted the opinion of the Attorney-General. The Attorney-General stated that the immunity of warships is one aspect related to the jurisdictional immunity of States. The international doctrine recognises warships as an organ of their flag State. This character is not altered by the fact that the public ship is in national or foreign territorial waters, or on the high seas, provided that it is operated under a responsible commander and in the service of the State.

Public ships at the service of the police and customs authorities, private ships chartered by the State for the transport of troops and war material, and ships that transport the head of a State and his/her staff are treated, for all legal purposes, as if they were warships. This doctrine reached international acceptance when it was established in the Immunity of State-Owned Ships Convention 1926, which principles were incorporated into the Treaty on the Law of International Commercial Navigation of Montevideo 1940. Both instruments are mandatory in Argentina and Uruguay. Article 3.1 of the Immunity of State-Owned Ships Convention 1926 establishes the immunity of ships of war, state-owned yachts, patrol vessels, hospital ships, fleet auxiliaries, supply ships, and other vessels owned or operated by a State and employed exclusively at the time when the cause of action arises on Government and non-commercial service. Both treaties establish that, in case of doubt about the nature of the service provided by the ship or its cargo, a certificate signed by the diplomatic representative of the flag State has the effect of conclusive evidence (art 5 of the Immunity of State-Owned Ships Convention 1926).

The plaintiff indicated in its lawsuit that the claim for damages resulted from a surveillance process carried out by the Uruguayan warship under the command of the defendant. Furthermore, the master of the ship and the Ambassador of Uruguay declared that the actions of the co-defendant constituted an 'act of service' in his capacity as agent of the Uruguayan State. This assertion must be taken as the formal and solemn declaration of the foreign State that is not subject to revision or controversy.