Three weeks ago I wrote that China, with its poor human rights record, had a habit of making western companies wriggle. Apartheid and its legacy have been doing the same for decades – and have now made the US legal system look silly.

Not much of an achievement, you may say, but even long-time scoffers at American law must have been startled by last week’s news that the US Supreme Court could not hear a case about corporate involvement in apartheid South Africa because too many of the judges had connections with the companies concerned.

Clearly, judges’ children have to work somewhere – the reason, it seems, one of the justices had to recuse himself. But three judges had to decline to hear the case because they held shares in companies accused of doing apartheid’s dirty work, leaving the court inquorate.

Why had the justices not divested themselves of their shares to guard against the eminently foreseeable event that one of the companies concerned would eventually appear before them in some case or other?

But then this case has been a mess from the start. It was brought on behalf of everyone who suffered under apartheid since its start in 1948. It alleged complicity with the system by about 50 companies, ranging from General Electric, BP and Credit Suisse to Nestlé and Coca-Cola.

The complaints against the companies were a “veritable cornucopia”, in the words of Judge John Sprizzo, who heard the case in the New York Southern District Court. Some of the complaints were made under the Alien Tort Claims Act, a 1789 statute allowing foreigners to bring actions for certain violations of “the law of nations”. Unless handled properly, Judge Sprizzo said, the act was “ripe for non-meritorious and blunderbuss suits”.

He clearly felt this was one, and dismissed it. The plaintiffs had produced no evidence that the companies had been directly involved in human rights violations. It was not enough to say they had aided and abetted violations, the judge said. A further allegation that the companies had engaged in racketeering “borders on the frivolous”.

The apartheid victims’ lawyers appealed to the US Court of Appeals for the Second Circuit, which decided by a two-to-one majority that, among other things, the act could indeed cover aiding and abetting, and sent the case back for reconsideration. The companies appealed against this ruling to the Supreme Court, which, not having enough unconflicted judges, was forced to let it stand, which means the case continues.

It is not only the companies that are appalled. South Africa’s post-apartheid government says its own judiciary is perfectly capable of dealing with the matter. “We consider it completely unacceptable that matters that are central to the future of our country should be adjudicated in foreign courts,” Thabo Mbeki, South Africa’s president, said.

When I asked Michael Hausfeld, one of the leading lawyers for the apartheid victims, what would happen now, he said he was not even sure what US court would hear the case.

While aspects of the suit may have been frivolous, apartheid was not. It was a vicious system, restricting every aspect of black people’s lives, including where they could live, what jobs they could do and what restaurants they could eat in. The role that companies played deserves more assiduous attention than the US legal process has so far afforded.

Among the questions that need to be settled is what aiding and abetting human rights abuses means. If a company sells goods or makes loans to a regime it knows will use them to harm people, is it guilty of the harm?

The issue arose during the Nuremberg trials after the second world war. Judge Edward Korman, the dissenting judge in the US appeal court, noted that the Nuremberg tribunals held that while making loans or selling goods to human rights abusers “may well be condemned from a moral standpoint and reflect no credit on the part of the lender or seller ... the transaction can hardly be said to be a crime”.

The defendant at Nuremberg was an officer of the Dresdner Bank, one of the defendants in the apartheid case. The context may change, the regime may be less murderous, but the question of proper corporate behaviour in difficult times remains.

Mr Hausfeld says that when the case resumes, it will focus on companies that provided direct assistance to the South African police and security services. He will not be bothering with Coca-Cola and Nestlé.

He is evasive about the South African government’s objections. Interestingly, Archbishop Desmond Tutu and the members of his Truth and Reconciliation Commission are keen for US courts to hear the case. Companies largely declined to appear before them. The truth commissioners said: “We are well aware of the virtues of the United States’ adversarial system of justice: through it, truths do emerge.” Given what has happened so far, that looks optimistic.

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