Communil 6 No. 59 10
. -&
The f ollciwinginformtion from the ;legis try of the Internationzl
Court of Justice has been comLcated to the Press:
To-day, Zharch 21st,1959, the International Court OZ Justice
delivered it.sJudpz~nt in the Ii~Cerhmd.el Ctise (~relim~icr 0b~jections)
SeSween Sv~itzerlllnd ad. the United States of .iu~!erica.
The case was suhmitted by an Application of the Swiss C-merment
on October ?nd, 1957, relrlting to a dispute r.rhic!z haarisen with
regard to Lhe clair11by Switzerlmd ta the restitution by the United
States of America of '&e essets of the Interhand-el Company, The
Application invoked Article 36, puragraph 2, of the Statute of the
Court the acceptwnce of the corriuulsory jurlsàiction of the Coud
by t;heUnited States and bg Switzerland. For as part,the Govern-
ment of the United States subdtted preljminary objections to khe
jurisdiction of the Court.
The Court, upholding on6 of these objections, found the Swlss
Application inadrr~issible.
In Its Judgmnt, the Court sets out the facts circmstmces
out of +hich the dispute arose,
In 1942, the Go~rernment of the United States, undes the Tred-Lng
with the Enemy Act, vested ~lhost 211 of the shares of the General
Aniline and Fihn Corporation (Cr&!) a,compm-y incorporzteid n the
United States, on the grounclthzt those sh'ras in realitg belonged
$0 the I.G. Farben Companyof Frankfurt or th?-t the GAF was in one
uray or ai~other controlled bg that enemy conpany. It is not disputed
that until 191+0 1,';;Farben controlled the GAFkhi-augh the I.G. Chemie
Company of Basls. Holj~vor, acoording to the contention of the' kwiss
Government, the links between.the Germa compzny.and, the Sreriss Company
brcre finally severcd in l9.40, The Swisscoxpari;. adopted the mme of
Soci&té internationale amr ncsrticipations; industrielles et c~merciales
-.A. (Interhmdrl) znd. the largest itemin its assets was its participa-
tionin the GAF. Ji?191+5, under a grovlslonal ag~ekr~sfi-t bettmen
Stirixerlmd, the United States, France and the United Kingdom, propef ty
in Switzerland belonging %O Germaans in GeLmfiy :$as bloc!red. The 51~2-ss
Compensation Office wzs entrusted inth the task of uncoyering çuch
property. In the course of thase investigittions, the questbn of the
chara.cter of Interhmdel was rnised, but the Office, considering it to
have been praved th3.t this company had severedits %%essfith the .C-erman
canpmy, did not regard it as necessary to undertnlce the blocking of
For it s p~rt, the Govemnent of the
its assets in S~+rLCzerl,uld,
United States,consLiering that Interhendel was still controlled by
X,G. Farben, contjnued to seek evidence of such control. In these
circumst;.aces, Lhe Swiss Fedcral Authorities orrtered the Swiss
Compensatio n ffice provjsionally ta block the nssets of Interhandel,
Dn May 25th, 1946, 2n ag~eement w2.s cbnclud-ed in Fi~.shington
between the Allies ?.ilcSwtt zer1;md. Swit z~rlmG undertool; Lo pursue
Its inve stigr, tionsauid to liquidnt% German propcrty inSwitzerlan , d
The .,,,The Compensatio Onffice wgs enpowered to do this, ul callabaration
with .aJoint Commission composed of representatlves of eachof the
four Govermnts, In the event of disagramnrnt hetwcn the Joint
Commission PLCI the Conrpensation Office, or Lf the prf;:r in bterest
so desircà, tha matter rrrightbe subrnitted to A Sz-riss flutharity of
Review, On the olher h;?nd, the Government of the United States I~S
to unblock Swiss asçetsin the United St;\tcs (~rticle DI), Fh?vl-ly,
in cass differenceu af opinion arose hith rcgard "~othe application
or interpretation of the 2tccord ~lriichcould nat bc settlcd ii?xiy
o"r,her way, recourse 7.rn.sGo ha h2ti t3 arbitr~~tion,
dStsr the conclusioiz of .the TnTashingto~ f,ccorcl,dis.r;u.ssionsv,6ti!
regard to Interhruidel were continued sLth~rk rztxi;ing m:~ conchs2o.1.
By its decisicin of J?mu,zry 5th, 19.48 he Svciss A.~ihor!~-ty of Review
~inulled the blockingof the Go:ripnyr s nçsets in Çwitzer1t:nd. In
a,Note of Mriy 4th of the sme .par to the Dep;:rtrricnt of State, the
Srirss kgak ion in tdzlshingt on invoked this ùccision and t11.eWashington
Accord to request the United St~,tes io 1-estarc to Interhandel the
~roperty whicl-i h2d Cievlnvvsted in khi: U~itecl States, On July 26th:
the Dcpartment of Stzt?. rejcctcd tbis r?quest, contending th?,t the
decision of the Swiss Au-thorLty of Bcview did nct affect GI-ivassets
vestad in Ghc Unitxi Stztes. On Ocbber 2ist, Ii~te~li:vmdcl, rslying
upon the provisions of khc! TïtLdkg with the Znemy Act, Lnstitutnd
proceedingi sn the United States courts, .Up to 1957, these prorcel--
Yigsmade little progFe;s on the merits. A 33;isç Note of Jiugust Ytn,
1956, r"omu1ated aropost,,ls fw the sottlcmerzk of the disputr? eithcr
by meas of arbitkr.!.tionor co~~cilj;!tion as prwided for in the Treat;
betwûen Swi-t;zerl,d t..nd the United St:?tus of 1731, or by mzans of
clrbitration as pi-oviL3cc!for in t.ha 9Jnslzir.gton Accord, Thcse proposal-?
werc rejected by t%e Governm?ii of -the United Statesin a Note of
Jcmuzr-g llth, 1957, hrthermore, in S..;lIemorcmaafi zp-ended to the
Note,it was said th~t Znterhqnd-el hrid fin2113 7 ailod 5.nits suit
in £h¢ Unitab States courts. 1S 7~r~1tien th3.t the Swiss Govermerit<
zddressed to the Court its ~LppLic:~.tionbstitutiry: the procoedhgs,
Th2 Court finds thc:t the uub ject cf th,-. clrtj_is! exprzssed
es~entlallj~ in tvro pr~positicir~s: i;E~eCowt is ::sl;ec"to 2djudge end
declara, as a princi-onl. subrnicis~&, th:it t,?:~ Coi-er:-.c,~t of the United
States is under an obligx~ion i,oreçt,o?t=t,te :tascts of Interhadel
-
and, 2's Pa alterpi:.tive SU~X~SS~O~?, th~l the United States 1s under
~ui obligation to submit; +,!le dispuLeto r,rhit%*,iri or ?;O 2 concili,z-
tion -prroced.ure.
The Court then proceeds t3 consicter the ?relixh-:~+ry Objection~
cf the United States,
Tha Fipst Ob,jectio_n seekç cldeclaratio nhat the Court is svith-
out .iurisdiction on the ground that the dispute arosc bvforeAugust
26th; 1946, the date on &ich the ncveptance o*' the cmplscryr
jwisdlction of %he Court by thc Unlt2cl States carre &ta force,
The declaration of the Uniticd States relates b legnl disputes
"hereafter arisjng" ;lnd tl-iGoverment of 'cheUnited Stcnltesmintains
thtiC the dispute submitted to the Cmt goes bac!< at 1eil.s-t ktko
middle of th~ year 19.45, in e:.camifiition of th2 documnts raveels
that itwas in the Mote of Ghe Svsl B Legrhion in i:hshir~gt;on d~~tcd
1k.y kth, lql& that a rcqmst for the roturn fa Zratarhzid.el of'the
assets vastod 111the United States tras formulc?ted 'y "Switzerland for
As the ne gat ive reply trciogiven on July 26th,19b5',
the first time .
the dispute cm be pIci.cec2ab that d~ite rmcl the Pirst Objecticn must
be rt3jected so far as the principal S~ibmission of Svritrter1,mc.lis
concefned. In Lhe ;,ltermtive Submiçsion, the point in dlspüte is the obligation of the hvernment of the United States to submit to
arbitration or conciliation, This part of the d-ispute can only
have arisen subsequently to thzt relnting to the restitution of
Interhandel's assets in the Unitec! States, since the procedure
proposed by Switzerlsnd vms conceived 2s ri.means of settling the
first dispute. In fsct, the Swiss Government put forviard this
proposa1 for the first tins in its Nota of iLugust 9th, 1956, and the
Government of the United States rejected it by its PJote of J.mua.ry
llth, 1957. The First Preliminary Objection carinot theref ore be
upheld vnth regard to the p.1ternatj-ve Submission of Stdtzerland.
According to the Second Preliriîinary Ob.jection, the dis~ute,
even if it is subsequent to the Declaration of the United tat tes.
arose before July 28th, 1946, the d:!te qf the entry into force of
the Sv6ss Declaration. The United Stê-tes Declaration contains a
clause limiting the Court's jurisdiction to disputes "hereafter.
arisingtt, while no such qualifying claust-: is contained in the Stsiss
Declaration , But the reciprocity principle '<rmuldrequire that as
between the United States md Switzerlmd ti?e Court's jurisdiction
should be limited to dis-tes arising z.iter July 28th) 1948. The
Court rem-irks that reciprocity in the case of Dechrations accepting
the complsory jurisciiction of the Court enables a Party to invoke a
reservation lirhich it hi~s not expressed in it s own Declar2,tion but
pihich the other Party has expressecl in its Declaration, For example,
Swit~rland might, if in the position of Respondent, involte the
herican reservation agzinst the United Statzs by virtue of reciprocity,
if the United States ztteri~pted to refer to the Court a dispute which
L%darisen brfore iwgust 26t'n, 1946. There the cffcct of reciprocity
ends. It ccuuiot justify a State, LT this instance the United States,
in relying upon a restriction vrhich the other Party, Switzerl;u-d, has
not included in its own Dcelaration. The Second Objection must
therefore be rej ected so far as the principal Submission of Stqitzerland
is concerned. Since it has been found that the dispute concerning
the ob1ig;ttion of the Unitrd States to agree to arbitrztion or con-
ciliation did not arise until1957, this objection must also be
rejected so 'far as the a1ter:iative Subrnission is concerned.
The Court theii consïcl~rs the Fourth Preliminary Ob,jectiog and, in
the first pl.Ce, ~~~~ (~)t of that Objection, in which the Governn~nt
of the United Stcttos su&i.ts f.ha.t there is no jurisdiction in the
a Court to haar or aetermine ?,nyissues concerning the seizure and ,
retention of the vested sharcs, for the rznson that such seizure 2nd
retention are, accordhg to international lavi, matters within the
jurisdiction of the United Stntzs. With rcgnrd. to the principci.l
Submission, the St6s s Governent invokes i'irticle IV of the !'lz;.shington
!iccord, concerning vrhich the Crovernment of the United States contends
that it is of no relevence whatsoever. The Parties are iri disagreé-
ment FCith regxrd to the meankg of the t?rm of this article. It is
suff icicnt 'for the Court to note that Article 17J my be of relevance
for the solution of the dispute cmd th~t its hterpretütion relates to
international law. On the other hand, the Governmcrrt of the United
Strites submits that according to intcrnational lnvr the seizure
retention of enemy property in time of war are matters within the
domestic jurisdiction of the United States. But the lehole question
is vrhether the assets of Interhadel are enemy or neutrczl property
md this is a mattcr vd~icn must bc decided in the light of the
principles and rules of international law, In its $!.ternative
Submission, Yhe Swiss Government invokes the TiJzshington Accord and
the Treaty of iirbitration 2nd Conciliation of 1931. The interpret2-
tion end crpplication of these nrovisions involve questions of inter-
national law. Part (-) of thc Fourth Objection must therefore be
re jec ted. Pert (2) of this Objection seeks a finding from the Court that it
is trithout jurisdiction for Che reason thnt the s:?le or disposition of
the shares vested have been dctûmined by the United States, pursuCant
to paragraph (d) of the conditions sttached to its acceptame of the
compulsory jurisdiction of the Court, to bc CL m.tter essentially
vrithin its domestic jurisdiction. It appears to the Court that
part (2) of the Fourth Objcction only applies to the clah of the
Swiss Goverment rsgarcling '~he restitution of the vestad kssets and,
hsving regürd to thc decision of the Court in respcct of the Third
Objection, it is >rithout object at the present stage of -Gle proceedings,
The Third Prsliniinaqy Objection. seaks a finding that th3re is no
juri-sdiction in the Court for Lhe rcc.son thnt Interhanclel he.s not
exhausted the 1oc;~l rcmedies zvriihble to it in the Uilitsd States
courts. i7Jthou@ frtmd sis an objection ta the jurisd.iction of the
Court, this Objection must bz regardcd as directcd agninst the
admissibility of the Lpplic~ltion. Indeed, it ~roulc! become devoid
of object if the requirement of the prior exhsustion of locel
remedies were fulfilled, The Court has indicated in vhat conditions
ihe SiEsiss Goverment consid-erzd itsolî entitlcd to institute procead-
ings by its Application of October 2nd) 1957. Hovrever, the Supreme
Court of the Unit::d Stt?tcs lias, since then, rea&itsted Interhmdel
into the suit and rent'mded the case to the District Court (dccisions
of Octobor U-bh, 1957, :nd June loth, 1958) . Interhandel cm avail
itself again of the remedies ?.vailable under the Trading vnth the
The Svnss C-overnment does
kew Act and its suit is still pending,
n@ challenge the rule concerning the exhaustion of local remedies
but contvnds that the preseiit c:!se is onc in vihich cul exception is
mthorized by the mile itself, In.thc first plc?.~~, the masure'
taken against Interhandcl tas trtken, not bg u subordb-ate outhority
but by. the Goverrir~~nt of th$ Unitod States. However, the Court
must attach àecisixre importance to the f~st that the ~IJS of the United
States make avaib.ble to interestcd persons adequ2,tc remedie s for
the defvnce of -their rights r:.gainst the Sxecutive. On the other hmd,
in procaodings bascd upon the Tradirg with the Znemy Lct, the United
States courts are, it is contcndcd, not in a positfion to adjudicate
in accordance vnth the i-ules of internntional lew. But the decisions
of the United St-ntes .courts bear vsitness to thc fnct that United States
courts are competent to apply internii.tioilal law ih their decisions vrhen
necessary. Finally, as the charactirr of the principal Submission of
St.ritzer1a.d is th2.t of <iclaim for the iiip1cment:stion of the decision
givm on January Sth, l9@, by the Svriss :&uthority of Revietr, vhich
decision the 3;liss bvermnt regards es an international judicial
declsion, there cre, it is contended, no local remdies to e:dw.ust,
for the injury has bean ccused directly to th2 State. 'The Court
confines itself to obscrving "s12,t this arguinmt does not deprive the
dispute vhich hns been referred'to it of the character of a dispute
in wilichathe Swiss Gove-mefit appears es having adopted -Vie cause of
its national for the purpose of securing the restitution of thé
vested assets and th2.t this is one of the very cases which give rise
to the applic3tion of the rulcnoî the exhaustion of locczl reniedies.
For al1 thcse reasons, %hr Court upholds the Third Preliminüry
Objection so far 2s the principal Submission of St.ritzerl:lnd is
concerned, The Court consid-ers, moreovcr, that 2,ny distinction
so f~r as the rule of the e;Siaustion of local remecl.iss is concerned
betwoen the vzrious claims or bettnreen the various tribunals is
unfounded. It sccordingly .upholds the Third Preliminary 0bjection
calso .as regr?rds the alternztive Submission.
Conssquently .,,, Consequently '~he Court re jects the Fkst PrelUninnry Objcction
(by tm votes to five) ,md nlso the Second(unar~hously) md p~rt (b)
of the Fourth (by U votes to one) . The Court Fkds that It is not
nccess2ryta edjudic?,te on pvt (2) of the Fourth Prslbinnry Objection
(by ten votes to five) md it upholds the Thlrd (by njne votes ta six)
:and holds th.-: te .:uplicntio in inadmisçibl~,
Judges RLSDaY~JIT :l.nKOJh'VNLXO a~c? Judge nd hoc CXKY hzve
appendedd .ecl,?rutions io thc Judgmcnt. Judges I!i"lCIC.iOIZCORDOVh,
Ts~.LELLINGKTOOOqand Sir Pcrcy SFJDEf have nppend.ed stntements of
thsir scpa.rate opinj-oriswhilst Vice-PïesidonZ tISWLL,1 K,ifN states
that he egrees with Judge HiiCOTORTH.
President Kt'2STi;D andJudges IKU\iIl;RSICjiRTk'~I\iT)-UCN,r Hersch
kUTERPIICl-ITand SPIROFOULDS have rrpgcnded to the Judpnt stc.tefi~sstof
their dissentina; opinions ~lhile Judgc ad hoc C.'ARY skates Ui his
declaratlon 'chat he agrces ~dth President KL:JST:;D.
The Hng~e, Ktrch Slst, 1959,
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Interhandel - Judgment