Summaries of Judgments, AdvNot an official documents of the Internationa
l Court of Justice
31. INTERHANDEL CASE(PRELIMINARY OBJECTIONS)
Judgment of21March1959
The Interhandel Case, between Switzc:rlandand the SwissFederal Authcdtiesorderedthe Swiss Compensation
UnitedStatesof America,wassubmittedto theCourtby an Officeprovisionally.toblockthe assetsofInterhandel.
ApplicationoftheSwissGovernmentonOcbober2nd, 1957,
relatingtoadisputewhichhadarisenwithregardtotheclaim On May 25th, 1!946,an agreement was concluded in
by Switzerlandto the restitutionby the United States of Washingtonbetween theAllies and Switzerland. Switzer-
America of the assets of the InterhandelCompany.The land undertookto pursueits investigationsandto liquidate
Application invoked Articl36, paragraph2, of the Statute Germanpropertyin Switzerland.The CompensationOffice
of theCourtandthe acceptanceof the compulsoryjurisdic- missioncomposed ofr'epresentativesofeachofthefourGov-
tion of the Courtby the UnitedStatesand ty Switzerland. ernments. In the event of disagreementbetween theJoint
For itspart, the Governmentof the Uniteditatessubmitted Commission andthe CompensationOffice,orifthepartyin
preliminary objectionto thejurisdictionoftheCourt. interestsodesired,themattermightbe submittedto a Swiss
The Court, upholdingone of theseobjections,foundthe AuthorityofReview..Ontheother hand,theGovernmentof
SwissApplicationinadmissible. theUnitedStateswasto unblockSwissassetsintheUnited
States(Articb IV). Finally,in case differencesof opinion
arosewithregardto the applicationor interpretationof the
Accord whichcouldnotbesettledinanyotherway,recourse
was tobe hadto arbitration.
In its Judgment,theCourtsetsout the factsandcircum- After theconclusi~onof the WashingtonAccord, discus-
stancesoutofwhichthe dispute arose. sions with regard to Interhandelwere continued without
In 1942,the Governmentof the UnitedStates, under the reaching any conclusion. By its decision of Januaryth.
Trading withtheEnemyAct, vestedalmostrlllof theshares 1948,the SwissAuthorityof Reviewannulledtheblocking
ofthe General AnilineandFilmCorporation(GAR, acom- oftheCompany'sassetsinSwitzerland.InaNoteofMay4th
pany incorporatedin the UnitedStates, on the ground that ofthe sameyearto theDepartmentofState,theSwissLega-
those sharesinrealitybelongedtotheI.G. FalrbenCompany tioninWashingtoninvokedthisdecisionandthe Washington
ofFrankfurtorthat theGAF wasinoneway'oranother con- Accordtorequest theUnitedStatestorestore toInterhandel
trolledby that enemycompany.It is not disputedthat until the propertywhichhadbeen vestedinthe UnitedStates.On
1940 I.G. Farben controlled theGAF through the I.G. tendingthatthepdecisionof the SwissAuthorityof Review
Chemie CompanyofBasle.However, acconlingto thecon- didnotaffecttheassetsvestedintheUnitedStates.On Octo-
tentionoftheSwissGovernment, thelinksbetweentheGer- ber 21st, Interhandel,relying upon the provisionsof the
mancompanyandtheSwisscompanywerefinallyseveredin 'Itadingwith the Ene:myAct, institutedproceedingsin the
1940.TheSwisscompany adopted thenameof Socit?tnter- UnitedStatescourts.Upto 1957,theseproceedingsmadelit-
nationalepourparticipationsindustriellesel'commerciales tleprogressonthemerits.ASwissNoteofAugust 9th.1956,
S.A. (Interhandel)and thelargestitem in its;assetswas itsformulated proposals for the settlemotf thedisputeeither
participationintheGARIn 1945,under aprosvisionaalgree- by meansofarbitrationorconciliationasprovidedforinthe
mentbetweenSwitzerland,theUnitedStates,Franceandthe TreatybetweenSwitz~aland andtheUnitedStatesof 1931,or
United Kingdom,propertyinSwitzerlandbel.onging toGer- by meansof arbitration asprovided forin the Washington
mans in Germanywas blocked. TheSwissCompensation Accord.These proposalswererejectedby the Government
Officewasentrustedwiththetaskof uncoveringsuchprop oftheUnitedStatesinaNote ofJanuary1lth, 1957.Further-
erty.Inthe courseofthoseinvestigations,the questionofthe more, in a Memorandumappendedto the Note, itwas said
characterofInterhandelwasraised,buttheOiffice,consider- that Interhandelhad finallyfailed in its suit in the United
ingit tohavebeen proved thatthiscompany hadseveredits States courts. Itwas then that the Swiss Government
tieswith the German company d,idnotregard itasnecessary addressedto the Cor;utits Applicationinstitutingthpro-
toundertaketheblockingof itsassetsinSwitzerland.Forits ceedings.
part, the Governmentof theUnitedStates,considering that
InterhandelwasstillcontrolledbyI.G.Farben,continuedto The Court findsthatthe subjectof the claimisexpressed
seek evidenceof such control.In theseirc~imstancest,he essentiallyintwoprolmsitions:the Courtisasked to adjudge
Continued on next pageanddeclare,asaprincipalsubmission,thattheGovernment reasonthatsuchseizureandretentionare,accordingtointer-
of the UnitedStates is under an obligationto restore the nationallaw, matters within thejurisdictionof the United
assetsof Interhandeland, asilnalternativesubmission,that States.Withregard to theprincipal Submission,the Swiss
theUnitedStatesis underanoibligationtosubmittlhedispute GovernmentinvokesArticleIVof theWashingtonAccord,
to arbitrationortoaconciliatilprucedure. concerningwhichthe GovernmentoftheUnitedStates con-
The Court then proceeds to consider fie Reliminary tendsthatit isofnorelevance whatsoeverT. heParties arein
ObjectionsoftheUnited State!!$. disagreementwithregard to themeaningofthe termsofthis
The seeks a declarationthat tcour is article. It is sufficientfor the Courtto note that ArticleIV
withoutjurisdiction on the I!roundthat the dispute maybeofrelevanceforthesolutionofthedisputeandthatits
beforeAugust26*, 1946,the:dateonwhichtheacceptance interpretationrelatestointernationallaw.Ontheotherhand,
of the compulsoryjurisdictiolnof the Court by the United the Governmentofthe UnitedStates submitsthat according
Statescameintoforce.Thedl!claration oftht:UnitedStates tointernationallawtheseizureandretentionofenemy prop-
relatesto legaldisputes"herenfterarising" theG ~ ~ ~ ~.- ertyintimeof wararematters withinthedomesticjurisdic-
meritof theUnited state msailltainsthat theclisputesubmit- tionof the UnitedStates.Butthewholequestionis whether
ted to theCourtgoesbackat ]easttothemiddle d the year the of Interhandelareenemy Or propertyand
1945.Anexamination dixumentsrevealsthatitwasin thisisamatterwhich mustbedecided inthelightoftheprin-
theN~~ swis ~s~~~~i~i~nWashingtondatedlM~~4th. ciplesandrulesof internationallaw.In its alternative Sub-
1948,thatarequestforthe returntoInterhandleolfthe assets Accord and the Treaty ofArbitration andConciliationofn
vested in the unitedstate s asformulatedby switzerland 1931.Theinterpretationandapplicationoftheseprovisions
for the first time. the negativereplywas givenon ~~l~ involvequestionsof internationallaw.Part(b)ofthe Fourth
26th. 1948,thedisputecan be,,lacedatthatdateandthe~i~~ Objectionmustthereforeberejected.
ObjectionmustberejectedsofarastheprincipalSubmission
of Switzerlandis concerned.In thealternative Submission, Part(a) of this Objectionseeksa findingfromthe Court
thepointindisputeistheobligationoftheGovernmentofthe thatit iswithoujturisdictionforthereasonthatthesaleordis-
United Statesto submitto arbitrationor con~cilia~tinh.is positionof the sharesvestedhave been determinedby the
part of the disputecan onlyhavearisensubsequentlyto that UnitedStates, pursuantto paragraph(b) of the conditions
relatingtotherestitutionofInlsrhandel'sassetsintheUnited attached toits acceptanceof the compulsoryjurisdictionof
States, since the procedureproposed by S~vitzerlandwas theCourt,tobeamatteressentiallywithinitsdomesticjuris-
conceivedasameansof settli~rrthefirst dispute.Infact,the diction. It appearsto theCourt thatpart(a)of the Fourth
in its Noteof August9th, 1956,andtheGovernmentof thetime regarding therestitutionof the vestedassets and, having
UnitedStatesrejected itby its Noteof January 1lth, 1957. regardto the decisionof the Courtin respectof the Third
TheFirst Preliminary Objection cannot thereforee upheld Objection, it is withoutobject at the preseintstage of the
with regardtothealternativeSubmissionof Switzerland. proceedings.
According tothe SecondPreliminary Objection, thedis- TheThirdPreliminaryObjectionseeksafindingthatthere
States,arosebeforeJu1~28th 1948,thedateof theentryinto isnojurisdictionintheCow forthereasonthatInterhandel
forceof the Swiss Declaration.The UnitedI'itatesDeclara- has not exhausted thelocal remediesavailableto it in the
tioncontainsaclauselimiting.theCourt'sjurisdictiontodis- United$;tatescourts.Althoughframedasanobjectiontothe
pUkS"hereafteriUiSing",whilenoSuchqudjlfyingclauseis jurisdictionoftheCourt,thisObjectionmustberegardedas
containedintheSwissDeclZUk3tio Bn.tthereciprocityprin- directedagainsttheadmissibilityoftheApplication.Indeed,
ciple wouldrequirethat as ktw~n the UnitedStates and it wouldbecomedevoidof objectif the requirementof the
SwitzerlandtheCourt'sjurisdictionshouldbe:limitedtodis- priorexhaustionof localremedieswerefulfilled.TheCourt
PueS arisingafterJuly 28th 11948T . heCou:flremarksthat sidereditselfentitledtoinstituteproceedingsbyitsApplica-
reciprocityinthecaseofIkclmationsacceptilng thecompul- tionof October2nd, 1957. However, theSupremeCourtof
SoVjurisdictionoftheCourtenablesa Partytoinvokeares- theUnitedStateshas,sincethen,readmittedInterhandelinto
ervationwhichithasnotexpre:ssed initsown1)eclmtionbut the suit and remandedthe case to the DistrictCourt (deci-
whichthe otherPartyhas expressedin its D~:clarationF. or sionsofOctober14th.1957,andJune16th.1958).Interhan-
example, Switzerlandmight, if in the positionof Respon- del can avail itself agof theremediesavailableunderthe
dent, invoke the American rr:servationagainst theUnited fiding withtheEnemyActanditssuitisstill1 pending.The
Statesbyvirtueofreciprocity!i,ftheUnitedSlatesattempted SwissGovernmentdoes not challenge therule concerning
torefertotheCourtadisputewhichhadarisenbeforeAugust theexhaustionoflocalremediesbutcontendsthatthepresent
26th. 1946. There the effectof reciprocitye:nds.It cannot case is one in which anexceptionis authorizedby the rule
justify a State, in this instance:the Uniteds,inrelying itself.Inthefirstplace,the measure takenagainstnterhan-
uponarestrictionwhichtheother PartySwitzerland,hasnot delwastaken,notbyasubordinateauthoritybutbytheGov-
includedinitsownDeclaration.TheSecondObjectionmust ernment of the United States, However, the Court must
thereforebe rejectedSofar a!;the principalSubnnissionof attachdecisiveimportanceto the fact that the laws of the
Switzerlandis concerned.Silolceit has kn foundthat the UnitedStatesmakeavailableto interestedpersonsadequate
dispute concerningthe obligiitionof the Ullited States to remediesforthedefenceoftheirrightsagainsttheExecutive.
agreeto arbitrationorconciliiltiondid notarise until1957, On the other hand, in proceedingsbaseduponthe pading
this objectionmustalsobe rejectedSO far as thea~lternative withtheEnemyAct, theUnitedStatescourtsare, it is con-
Submissionisconcerned. tended,]notinapositiontoadjudicateinaccordancewiththe
The CourtthenconsiderstheFourthPrelitrinury Objec- rules of international law.But the decisionsof the United
tionand,inthe firstplaceM: (b)ofthatObjection,in which Statescourtsbear witnesstothefactthat UnitedStatescourts
the Governmentof theUnited.Statessubmitsthat thereisno arecompetent to applyinternationallaw in their decisions
jurisdictionintheCourtto hearordeterminemy issues con- when nr:cessary.Finally, asthe characterof the principal
cerningthe seizureandretentionofthevested shams,forthe Submissionof Switzerlandis thatof a claimfor the imple-
47mentationofthedecisiongiven onJanuary.Sth,1948,bythe Consequently, the Court rejects the First Preliminary
SwissAuthorityof Review,whichdecisior~ the SwissGov- Objection(by tenvotesto five)andalsothe Second(unani-
emment regards as an internationaljudiciaddecision,there mously)andpart(b)oftheFourth(by 14votesto one).The
are, it is contended,no local remediesto exhaust, for the Court findsthatit isnotnecessarytoadjudicateon part(a)of
injuryhasbeencauseddirectly to the State. The Courtcon- theFourthPreliminaryObjection(byten votes tofive)andit
finesitselfto observingthatthisargument doesnotdeprive upholdsthe Third(:bynine votesto six) and holdsthat the
the disputewhichhasbeenreferredto itofthecharacterofa Aplplicatioisinadmissible.
disputein whichthe SwissGovernmentappearsas having Judges BasdevantandKojevnikovand JudgeadhocCany
adoptedthe causeof itsnationalforthepurposeof securing have appendeddecl!arationsto the Judgment. JudgesHack-
therestitutionof thevestedassetsandthat,thisis oneof the worth, Cordova, VVellington Koo and Sir Percy Spender
verycaseswhichgiverisetotheapplicationoftheruleofthe have appendedstatementsof their separate opinionswhilst
exhaustionoflocal remedies. Foarllthesereasons,heCourt Vice-PresidentZafnullaKahnstatesthatheagreeswithJudge
upholdstheThirdPreliminaryObjectionsofarastheprinci- Hackworth.
palSubmissionofSwitzerlandisconcerned. TheCourtcon-
siders,moreover,thatanydistinctionso farastheruleofthe PresidentKlaestad andJudgesWiniarski, Armand-Ugon,
exhaustionof local remediesisconcernedbetweenthevati- SirHerschLauterpiachtand Spiropouloshave appendedto
ousclaimsor betweenthevarioustribunalsisunfounded.It the Judgmentstatementsof their dissenting opinionswhile
accordingly upholdstheThird Preliminary Objectioanlsoas Judgead hoc Cany statesin his declaration thathe agrees
regardsthe alternativeSubmission. withPresidentKlaestad.
Summary of the Judgment of 21 March 1959