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owned Finnish ships were used by the British government (4) With regard to yet another aspect of the exist-
in wartime service during 1916 and 1917. Following the ence of "effective" local remedies, it is generally ac-
war, the Finnish government, on behalf of its citizens, cepted that a state may waive the requirement of exhaus-
sought compensation from Great Britain for the use of tion of local remedies, thus allowing claims against it to be
these vessels. This claim was rejected by the British brought by another state directly to an international tri-
government, and the shipowners brought proceedings bunal. 22 Moreover, an additional exception to the local
against the Crown before the Admiralty Transport Ar- remedies rule may be applicable if ". .. the state of the
bitration Board. The Board also denied compensation. alien's nationality, which has espoused his claim, is assert-
Although an appeal was available to the shipowners at this ing on its own behalf a separate and preponderant claim
point, they chose not to pursue the appellate process. In- for direct injury to it arising o~t of the same wrongful con-
stead, Finland again took up the claims of its citizens and duct." 23
brought the matter to the attention of the Council of the 7-8. Nationality of the Individual Claimant. a. General.
League of Nations. On the Council's recommendation, As previously noted, a state is imbued with the authority
the two states agreed to submit to arbitration the question to espouse the claim of a private or corporate claimant on
of whether the Finnish shipowners had exhausted "the an international level on the basis that the state itself has
means of recourse placed at their disposal by British law." suffered an "indirect injury." That is, because its citizen
In arguments before a sole arbitrator, Great Britain con- has been the victim of a substantive breach of internation
tended that the Finnish shipowners had not exhausted the law, the state itself has suffered injury. Accordingly, it is
local judicial remedies available to them and, as a result, essential to the validity of the legal fiction upon which
the Finnish government had no standing to espouse the state representation is based that the nationality of the pri-
claim of its citizens at an international level. Finland vate claimant be clearly established.
asserted that further appellate action by its citizens in the b. Individuals. The nationality of private individuals
British courts would be pointless. As there could be no de has been dealt with in chapter 6 of this publication. Thus,
novo appeal, any appellate decision would be controlled by the factors bearing on the determination of the nationality
the Admiralty Board's original adverse fmding of facts. of these individuals will not be discussed. Several related
The arbitrator agreed that, due to the lack of de novo ap- issues do, however, merit brief analysis. Restatement,
peal, further appellate procedure was useless and would Second, 5 17 1, defines an alien as follows:
provide no effective remedy for relief. Accordiiy, Fin- A person is an alien for purposes of the responsibility of a state for in-
land was justified in asserting the claim on behalf of its jury to an alien, if (a) he is not a national of the respondent state, (b) he
citizens. is a national of the respondent state and of another state, and the re-
(2) In the Interhandel Case, 19 Interhandel, a Swiss spondent state, for purposes of the conduct causing injury, treats him
corporation, brought an action in the U.S. District Court as a national of the other state, or (c) he is a national of the respondent
state and of another state, provided (i) his dominant nationality, by
to recover shares of an American corporation that the reason of residence or other association subject to his control (or the
U.S. had vested in 1942 as German assets. The District control of a member of his family whose nationality determines his na-
Court dismissed the complaint, and Court of Appeals tionality) is that of the other state and (i) he (or such member of his
affirmed. While Interhandel's petition for certiorari was family) has manifested an intention to be a national of the other state
and has taken all reasonably practicable steps to avoid or terminate his
pending before the Supreme Court, the Swiss govern-
status as a national of the respondent state. 24
ment commenced proceedings against the U.S. in the In-
ternational Court of Justice on behalf of Interhandel. The In those cases where a claimant changes his nationality
Supreme Court subsequently reversed the Court of Ap- after the injury on which his claim is based has occurred,
peals and remanded the case to the District Court. 20 The or assigns his claim to a person of another nationality, or
International Court found that local remedies in the U.S. dies and leaves heirs of a different nationality, the in-
had not been exhausted. dividual's claim may or may not be espoused by the state
(3) If an alien claimant loses on a point of law before of which he is a citizen. The position of the U.S. Depart-
a court of first instance, is he obliged to appeal even if the ment of State on this matter was formulated as follows by
appellate courts regard the applicable point of law as well an Assistant Legal Adviser in 1960:
settled? In the Panevezys-Saldutiskis Ry. Case21 the Under generally accepted principles of international law and practice, a
Court stated that if it could be substantiated that the high- claim may properly be espoused by one government against another
government only on behalf of a national of the government espousing
est Lithuanian court had already given a decision in a pre-
the claim, who had that status at the time the claim arose and con-
vious case adverse to the Estonian company's claim, there tinuously thereafter to the date of presentation of the claim. It has been
would be no need to appeal in order to satisfy the local the long-standing practice of the Department to decline to espouse
remedies rule. claims which have not been continuously owned by United States na-

19. Interhandel Case [I9591 I.C.J.6. 22. H. Freeman, The International Responsibili& of Srates for
20. interhandel-1959. Denial of Justice 435-36 (1938) [hereinafter cited as H. FreemanC
21. Panevzys-Saldutiskis Ry. Case 119391 P.C.I.J., ser. A/B, No. 23. Resratement, supra, note 11 at 5 208(c).
76. 9 24. Id. at 8 171.