Interhandel Case Switzerland v US

After unsuccessful court proceedings in the US, Switzerland brought this claim (1957) under optional clause for restitution of the assets of Intherhandel, a Swiss company in the US. The property had been taken by the US in 1942 on the ground that Interhandel was German and so enemy controlled. In 26 August 1946 US accepted optional clause jurisdiction with respect to disputes ‘hereafter arising’ US and Switzerland have been at odds about a dispute in the Interhandel case before the US declaration, but with respect to the claims in issue, the claim for restitution to Interhandel of its assets, on 26 July 1948 US rejected the Swiss representation on behalf the company. Swiss made an optional clause declaration on 28 July 1948, without reservations and present the case. US argued that it could apply its ‘hereafter arising’ reservation to the Swiss acceptance, applying reciprocity principle, so the court jurisdiction would be limited to disputes after 26 July 1948, Swiss acceptance date. ICJ rejected the argument The case was considered inadmissible on the ground of non exhaustion of local remedies

Reciprocity enables a Party to invoke a reservation to that acceptance which it has not been expressed in its own declaration but which the other party has expressed in its declaration… Reciprocity enables the state which has made the wider acceptance of the jurisdiction of the Court to rely upon the reservations to the acceptance laid down by the other party. ‘A state may not even exercise its diplomatic protection and much less resort to any kind of international procedure of redress, unless its subject has previously exhausted the legal remedies offered him by the State of whose action he complains’