In the 1922 case of The Sao Vicente: Transportes Maritimos Do Estado, Claimant Of S.S. Sao Vicente v. Tiejens & Lang Drydock Company, the U.S Supreme Court ruled on a dispute over maritime law and international jurisdiction. The Portuguese government-owned ship "Sao Vicente" was seized by Tiejens & Lang Drydock Company in New York for unpaid repair bills. Portugal argued that as a sovereign nation, its property could not be subjected to seizure under U.S law without its consent (a principle known as sovereign immunity). However, the court held that when a foreign state engages in commercial activity such as shipping operations within another country's territory it implicitly waives this immunity and subjects itself to local laws regarding those activities. Therefore, the seizure of "Sao Vicente" was deemed lawful.

In the dissenting opinion for the case of The Sao Vicente: Transportes Maritimos Do Estado, Claimant Of S.S. Sao Vicente v. Tiejens & Lang Drydock Company, Justice Holmes disagreed with the majority's decision to deny recovery to a shipowner whose vessel was damaged while in dry dock due to negligence on part of the dry dock company. He argued that it was unjust and against established principles of maritime law not to hold a bailee liable for damages caused by their own carelessness or neglect. According to him, when a party entrusts its property into another's custody under contract terms which do not expressly exempt them from liability for negligent damage, they should be held accountable if such damage occurs due their negligence.