The ELSI Case (U.S. v. Italy)

1989 I.C.J. 15 (1989)

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The ELSI Case (U.S. v. Italy)

International Court of Justice
1989 I.C.J. 15 (1989)

SC

Facts

In 1948, the United States (plaintiff) and Italy (defendant) signed the Treaty of Friendship, Commerce and Navigation. The treaty permitted corporations of one country to control and manage the affairs of corporations of the other country, and vice versa, in accordance with applicable laws of the other country. Raytheon-Elsi S.p.A. (ELSI) was an Italian corporation wholly owned by two American corporations, the Raytheon Company and The Machlett Laboratories Incorporated. ELSI had financial problems and plans began to liquidate the company’s assets. ELSI had a large facility in Palermo, Italy. The Mayor of Palermo, given the importance of the ELSI facility to the municipality and its people, issued an order requisitioning the facility and its assets for six months. The company then went into bankruptcy. At the close of the bankruptcy proceeding, there were no remaining funds to pay Raytheon or Machlett shareholders. The United States instituted proceedings in the International Court of Justice (ICJ), alleging that the mayor’s order violated the treaty by impermissibly altering the manner of disposing of ELSI’s assets. The United States and Italy requested that the ICJ establish a chamber to hear the case. The ICJ agreed and established a chamber of five judges to hear the case.

Rule of Law

Issue

Holding and Reasoning ()

Dissent (Schwebel, J.)

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