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076-Elettronica Sicula S.p.A. (ELSI) (USA vs. Italy)

On February 6th, 1987, the United States filed before the International Court of Justice (ICJ) an application instituting proceedings against Italy concerning a dispute arising from the requisition by the Italian Government of the factory and other assets of Raytheon-Elsi S.p.A., an Italian company which was, in its view, completely controlled by two American companies.

Italy, for its part, raised an preliminary objection relating to the admissibility of the application, based on the failure to exhaust domestic remedies. This point was addressed in the judgment on the merits delivered on July 20th, 1989, when considering all the arguments raised by the USA namely:

  1. The unlawful requisition of the ELSI plant, thus depriving the shareholders of their direct right to proceed with the liquidation of the company’s assets under normal conditions;
  2. The lack of response during the occupation of the factory by its workers;
  3. The silence on the legitimacy of the requisition for a period of sixteen months;
  4. The intervention by the State in the bankruptcy proceedings, with the result that it had purchased ELSI at a price well below its true market value.

All this constituted, according to the applicant, a violation of the bilateral Treaty of Friendship, Commerce and Navigation of 1948 signed between the 2 States.

In its judgment, the ICJ first rejected the objection relating to the admissibility of the application raised by Italy. After examining all the documents provided, it could not conclude that Italy had breached its obligations and therefore rejected all of the United States’ claims.

Judgment of 20-07-1989.pdf

This summary is provided for informational purposes only, does not involve the responsibility of Dome and should in no way be used as a substitute for a careful reading of the judgment and order of the case.