The case concerning Interhandel (Switzerland v United States) – 1958

During World War II, the United States, by virtue of the Trading With The Enemy Act 1917, restricted
trades with its enemies and blocked the assets of enemy properties (the Axis; German, Italy & Japan)

On May 25th, 1946, the Allied (US, Britain & the Soviet Union) together with Switzerland entered into
an agreement, The Washington Accord 1946

Article IV of the Washington Agreement provides that, “The Government of the US will unblock
Swiss assets in the US. The necessary procedures will be determined without delay”

The US declined to unblock the assets of ‘Interhandel’, a Swiss company because it was under the
impression that the Swiss company still had connection with the German (US enemy)

Switzerland contended otherwise as the connection was severed 1931 which was before the US
entered into the World II (1939-1945)

Switzerland brought the case to the International Court of Justice to recover the property

But the United States raised 4 preliminary objections, the third concerned the failure on the part of
Switzerland to exhaust the local remedies

In response to the preliminary objection, Switzerland contended that the proceedings at the local
court in the US were based on the Trading with the Enemy Act 1917

The court rejected this argument, stating that any distinction, so far as the rule of the exhaustion of
local remedies is concerned between the various claims or between the various tribunals, is
unfounded

This is because the interest of the local claim was the basis for the claim before the ICJ

Because the local claim had induced the Swiss Government to institute international proceedings

The court declined jurisdiction because Interhandel’s case at the local Court in the US was still
pending at that time, ascertaining the application of exhaustion of local remedies