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The Inerhandel Case (Decision of the ICJ of

PIL
02 March 21, 1949)
- March 21, 1949 - Cams
Petitioners: Respondents:
Switzerland United States
Recit Ready Summary

[Oct. 2, 1957] This case was instituted when the Swiss Government filed an application with the Registrar of the
International Court of Justice (ICJ) claiming restitution of assets of its national, Interhandel, which had been vested
in the US during WWII under the claim that they were enemy and not neutral property. The application invoked the
compulsory jurisdiction of the Court (under article 36 (2) of its Statute) which both parties formally accepted.

The Court proceeds to consider the following objections. On the First and Second Objections, the Court said that
reciprocity may not be used to justify a State, in this instance, the United States, in relying upon a restriction which
the other Party, Switzerland, has not included in its own Declaration. On the Fourth Objection, the Court held that in
challenging the seizure and retention by the United States of Interhandel assets, the Swiss Government had invoked
both general international law and a specific international act and the interpretation of the terms raised is a question
of international law which affects the merits of the dispute. Lastly, with respect to the Third Preliminary Objection
(which the Court upheld) said that this is considered one to the admissibility of the case for adjudication rather than
to its jurisdiction. US laws make available adequate remedies for the defense of their rights against the Executive
and US courts are competent to apply international law in their decisions when necessary. Further, as the character
of the principal Submission of Switzerland is that of a claim for the implementation of the Jan. 5, 1948 decision by
the Swiss Authority of Review, which the Swiss government regards as an international judicial decision, there are
no local remedies to exhaust for the injury has been caused directly to the State. Ultimately, it ruled the Swiss
application inadmissible.
Facts

1. [1942] The US government, under the Trading with the Enemy Act, vested almost all of the shares of the
General Aniline & Film Corp. (GAF), on the ground that those shares in reality, belonged to the IG Farben
Co. of Frankfurt or that GAF was controlled by that enemy co.
2. [1940] The links between the German co. & the Swiss co. were severed. The Swiss co. was named “Societe
international pour participations industrielles et commerciales S.A. (Interhandel)” & the largest item in its
assets was its participation in the GAF.
3. [1945] The property in Switzerland belonging to the Germans in Germany was blocked under a provisional
agreement between Switzerland, US, France and the UK.
4. The Swiss Compensation Office held investigations on Interhandel and the question of its character was
raised. It did not undertake the blocking of its assets in Switzerland considering it to have been proved that
this company had severed its ties with the German company. For its part, the Government of the United
States, considering that Interhandel was still controlled by I.G. Farben, continued to seek evidence of such
control. With these, the Swiss Federal Authorities ordered the Office to provisionally block the assets of
Interhandel.
5. [May 25, 1946] The Allies and Switzerland concluded in Washington an Agreement.
a. Switzerland undertook to pursue its investigations and to liquidate German property in Switzerland
through the Compensation Office, in collaboration with a Joint Commission composed of
representatives of each of the 4 Governments. In the event of disagreement between the Joint
Commission and the Compensation Office, or if the party in interest so desired, the matter might be
submitted to a Swiss Authority of Review.
b. The US Government was to unblock Swiss assets in the United States (Article IV).
c. In case differences of opinion arose with regard to the application or interpretation of the Accord which
could not be settled in any other way, recourse was to be had to arbitration.
6. [Jan. 5, 1948] The Swiss Authority of Review annulled the blocking of the Company's assets in
Switzerland.
7. [May 4, 1948] The Swiss Legation in Washington, through a note to the Department of State, invoked this
decision and the Washington Accord to request US to restore to Interhandel the property which had been
vested in the US.
8. [July 26] The Department of State rejected this, contending that the decision of the Swiss Authority of
Review did not affect the assets vested in the US.
9. [Oct. 21] Interhandel, relying upon the provisions of the Trading with the Enemy Act, instituted proceedings
in the US courts.

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10. [Aug. 9, 1956] A Swiss Note formulated proposals for the settlement of the dispute either by arbitration or
conciliation as provided for in the Treaty between Switzerland and the US of 193 1, or by arbitration as
provided for in the Washington Accord.
11. [Jan. 11, 1957] However, the US government rejected these proposals. Furthermore, in a Memorandum
appended to the Note, it was said that Interhandel had finally failed in its suit in the United States courts. It
was then that the Swiss Government addressed to the Court its Application instituting the proceedings.
Procedural History

1. The Court denied and found unnecessary Switzerland’s request for interim measures of protection.
2. Plaintiff filed its memorial and defendant replied with preliminary objections to the jurisdiction of the Court.
Consequently, proceedings on the merits were suspended (Art. 62 of the Rules of Court).
3. [Nov. 1958] US preliminary objections were heard while the Swiss government presented its submissions
in the application, pleadings, and oral proceedings. The US government re-affirmed submissions
accompanying its preliminary objections at the time of the oral proceedings which were concerned with the
objections to the jurisdiction of the Court.
4. [Mar. 21, 1959] The Court, after a brief historical review of the dispute, disposed in a judgment of a request
by Switzerland for a declaratory judgment on the ground that it was inadmissible at the present stage of
proceedings (Art. 62 of the Rules).
a. The Swiss submissions asked for judgment that the Government of the United States was under
obligation to restore the Interhandel assets or else to submit the dispute regarding them to arbitration
or conciliation under agreements to which both parties to the dispute were parties.
b. The Court then proceeded to consider the United States' objections to its jurisdiction, four in number,
one of them consisting of two parts, choosing the order to suit the convenience of its presentation.
Issue
Whether the World Court lacked jurisdiction in this case- NO

Objections: Lack of Jurisdiction Court’s Reply


1. First objection Reciprocity enables the State which has made the
There is no jurisdiction in the Court to hear or wider acceptance of the jurisdiction of the Court to rely
determine the matters raised by the Swiss upon the reservations to the acceptance laid down by
Application and Memorial since the dispute the other Party. There the effect of reciprocity ends. It
arose before August 26, 1946, the date on cannot justify a State, in this instance, the United
which the acceptance of the Court's States, in relying upon a restriction which the other
compulsory jurisdiction by this country Party, Switzerland, has not included in its own
became effective. Declaration.
2. Second preliminary objection
Also, the United States Declaration, which
was effective August 26th, 1946, contained
the clause limiting the Court's jurisdiction to
disputes "hereafter arising," no such qualifying
clause is contained in the Swiss Declaration
which was effective July 28th, 1948. But the
reciprocity principle . . . requires that as
between the United States and Switzerland
the Court's jurisdiction be limited to disputes
arising after July 28th, 1948 .... Otherwise,
retroactive effect would be given to the
compulsory jurisdiction of the Court.
3. Fourth Preliminary Objection Part (b) The Court noted that in challenging the seizure and
There is no jurisdiction in this Court to hear or retention by the United States of Interhandel assets, the
determine any issues raised by the Swiss Swiss Government had invoked both general
Application or Memorial concerning the international law and a specific international act.
seizure and retention of the vested shares of
General Aniline and Film Corporation as Here, the parties disagreed with the meanings of the
international law provides that these are terms “unblock” and “Swiss assets”. Switzerland
matters within the domestic jurisdiction of the invoked the Washington Accord and argued that
United States. Interhandel's assets in the United States were covered
by the provision that the United States "will unblock
Swiss assets." US contended that the Accord related to
German property in Switzerland and the provision for

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unblocking was "of no relevance whatever in the
present dispute."

The interpretation of these terms, including that of the


arbitration clause, is a question of international law
which affects the merits of the dispute.
4. Part (a) This only applies to the claim of the Swiss government
The sale or disposition of the shares vested regarding the restitution of the vested assets and
have been determined by the US pursuant to having regard to the decision of the Court in respect of
paragraph (b) of the conditions attached to its the Third Objection, it is without object at the present
acceptance of the compulsory jurisdiction of stage of the proceedings.
the Court to be a matter essentially within its
domestic jurisdiction.
5. Third Preliminary Objection (upheld) This objection is considered one to the admissibility of
Interhandel, whose case Switzerland is the case for adjudication rather than to its jurisdiction.
espousing, has not exhausted the local
remedies available to it in the United States US laws make available adequate remedies for the
courts. defense of their rights against the Executive and US
courts are competent to apply international law in their
decisions when necessary.

Further, as the character of the principal Submission of


Switzerland is that of a claim for the implementation of
the Jan. 5, 1948 decision by the Swiss Authority of
Review, which the Swiss government regards as an
international judicial decision, there are no local
remedies to exhaust for the injury has been caused
directly to the State.

Disposition

Consequently, the Court rejects the First Preliminary Objection (by ten votes to five) and also the Second
(unanimously) and part (b) of the Fourth (by 14 votes to one). The Court finds that it is not necessary to adjudicate
on part (a) of the Fourth Preliminary Objection (by ten votes to five) and it upholds the Third (:by nine votes to six)
and holds that the Swiss Application is inadmissible.