The Fribourg Navigation Co., Inc. v. Commissioner of Internal Revenue case in 1965 revolved around the issue of tax liability for a foreign corporation operating ships that docked at U.S ports. The Supreme Court ruled against Fribourg, a Swiss company, stating that it was liable to pay taxes on its income derived from shipping activities in the United States under Section 881(a) (3) and Section 883(a)(1) of the Internal Revenue Code of 1954. The court found that these sections did not violate any due process or equal protection principles as argued by Fribourg because they were designed to encourage reciprocal tax treatment between nations and prevent international double taxation issues.

In the dissenting opinion for Fribourg Navigation Co., Inc. v. Commissioner of Internal Revenue, Justice Harlan disagreed with the majority's interpretation of Section 883-1(a) and (b). He argued that these sections should not be read in isolation but rather as part of a broader statutory scheme aimed at promoting international tax reciprocity. According to him, Congress intended to exempt foreign corporations from U.S taxes only if their home country provided similar exemptions to American companies operating there. The majority's decision would allow Swiss shipping firms like Fribourg Navigation Co., Inc., which were effectively controlled by non-Swiss shareholders, to enjoy tax benefits without Switzerland reciprocating such treatment for U.S corporations under its control - an outcome he believed was contrary to Congressional intent.