find a dispute over alleged violation of the FCN Treaty resulting in direct
injury to the United States, that is both distinct from, and independent
of, the dispute over the alleged violation in respect of Raytheon and
Machlett. The case arises from a dispute which the Parties did not "satisfactorily adjust by diplomacy"; and that dispute was described in the
1974 United States claim made at the diplomatic level as a "claim of the
Government of the United States of America on behalf of Raytheon
Company and Machlett Laboratories, Incorporated". The Agent of
the United States told the Chamber in the oral proceedings that
"the United States seeks reparation for injuries suffered by Raytheon and
Machlett". And indeed, as will appear later, the question whether there has
been a breach of the FCN Treaty is itself much involved with the financial
position of the Italian Company, ELSI, which was controlled by Raytheon
and Machlett.
52. Moreover, when the Court was, in the Interhandelcase, faced with a
not dissimilar argument by Switzerland that in that case its "principal submission" was in respect of a "direct breach of international law" and
therefore not subject to the local remedies rule, the Court, having analysed that "principal submission", found that it was bound up with the
diplomatic protection claim, and that the Applicant's arguments "do not
deprive the dispute . . . of the character of a dispute in which the Swiss
Government appears as having adopted the cause of its national . . ."
(Interhandel, Judgment, I.C.J. Reports 1959, p. 28). In the present case,
likewise, the Chamber has no doubt that the matter which colours and
pervades the United States claim as a whole, is the alleged damage
to Raytheon and Machlett, said to have resulted from the actions of the
Respondent. Accordingly, the Chamber rejects the argument that in the
present case there is a part of the Applicant's claim which can be severed
so as to render the local remedies rule inapplicable to that part.
53. There was a further argument of the Applicant, based on estoppel
in relation to the application of the local remedies rule, which should be
examined. In the "Memorandum of Law" elaborating the United States
claim on the diplomatic plane, transmitted to the Italian Government by
Note Verbale of 7 February 1974, one finds that the whole of Part VI
(pp. 53 et seq.) deals generally and at some length with the "Exhaustion of
Local Remedies". There were also annexed the opinions of the lawyers
advising the Applicant, which dealt directly with the position of Raytheon
and Machlett in relation to the local remedies rule. The Memorandum
concluded that Raytheon and Machlett had indeed exhausted "every
meaningful legal remedy available to them in Italy" (paragraph 46 above).
In view of this evidence that the United States was very much aware that it
must satisfy the local remedies rule, that it evidently believed that the rule
had been satisfied, and that it had been advised that the shareholders of