## Facts

- During World War II, U.S. authorities vested (seized as enemy property) almost all shares of General Aniline & Film Corporation (GAF) that were held by Société internationale pour participations industrielles et commerciales S.A. (Interhandel), a company incorporated in Switzerland.
- The United States treated the shares as subject to vesting on the basis that they were allegedly German-controlled (linked to I.G. Farben interests), while Switzerland maintained Interhandel was genuinely Swiss.
- Switzerland pursued the matter through diplomatic exchanges with the United States and, in 1957, brought the dispute to the International Court of Justice (ICJ) while domestic proceedings in the United States concerning the vested property were still pending.
- On 1 October 1957 (filed 2 October 1957), Switzerland instituted proceedings asking the Court to declare that the United States was obliged to restore Interhandel’s vested assets, or alternatively to declare that the dispute should be submitted to judicial settlement, arbitration, or conciliation.
- Switzerland relied on the parties’ declarations accepting compulsory jurisdiction under Article 36(2) of the ICJ Statute (U.S. declaration of 1946; Swiss declaration of 1948).
- On 3 October 1957, Switzerland requested provisional measures to prevent disposition of the contested assets; the Court, by Order of 24 October 1957, found there was no need to indicate such measures.
- The United States filed preliminary objections challenging the Court’s jurisdiction and the admissibility of the Application, including objections based on reservations in its Article 36(2) declaration (notably the domestic-jurisdiction reservation) and on the non-exhaustion of local remedies.
- The Court suspended proceedings on the merits and, in its 21 March 1959 judgment, decided only the preliminary objections.

## Issues

1. Whether the ICJ had jurisdiction under Article 36(2) despite reservations in the U.S. declaration (including objections framed around matters said to fall within U.S. domestic jurisdiction).
2. Whether Switzerland’s Application—brought to obtain restitution for a Swiss company’s vested assets—was inadmissible because Interhandel had not exhausted reasonably available remedies in U.S. courts before Switzerland espoused the claim.
3. Whether any exception to the local-remedies requirement applied (for example, that available U.S. remedies were ineffective or obviously futile).

## Decision

- The Court held that Switzerland’s Application was **inadmissible** because **local remedies in the United States had not been exhausted** by Interhandel.
- The Court treated Switzerland’s claim as an exercise of **diplomatic protection** of a Swiss corporation and applied the local-remedies rule as a prerequisite to admissibility in that setting.
- The Court found that Interhandel still had judicial avenues open in the United States and that Switzerland had not shown those remedies to be clearly ineffective or obviously futile.
- Having disposed of the case on inadmissibility, the Court did not proceed to decide the merits of the alleged wrongful vesting or order restitution, and it did not need to determine all other preliminary objections.

## Legal Principles

- In a diplomatic-protection claim, **exhaustion of available and effective local remedies** in the respondent State is a condition that must normally be met before the claim is admissible before an international court.
- The burden lies on the applicant State to show either that local remedies have been exhausted or that a recognized exception applies (such as clear futility or lack of effectiveness).
- The existence of ongoing or still-available domestic proceedings generally defeats admissibility on the local-remedies rule, even if there has been prolonged diplomatic disagreement between States.
- An international court may address jurisdictional objections sufficiently to decide whether it can rule on admissibility, and may dismiss a case on admissibility without reaching the merits.

## Conclusion

In its Judgment on Preliminary Objections in *Interhandel (Switzerland v. United States of America)*, the ICJ dismissed Switzerland’s Application as inadmissible because Interhandel had not exhausted available U.S. judicial remedies concerning the vested GAF shares; the Court therefore did not determine the legality of the vesting or order restitution on the merits.


Interhandel (Switz. v. U.S.), Judgment, 1959 I.C.J. 6 (Mar. 21).