Panevezys Saldutiskis Railway co Case Estonia v Lithuania

A company was set up in Russia in 1892; such a company established a line between P to S. traversing territory that later became Lithuanian and Estonian. An Estonian company claiming to be the successor of the Russian one, claimed compensation to the Lithuanian government for the part of the rail that run in its territory. In this case Estonia espoused the claim of the company. Lithuania objected: 1. continuous nationality principle 2. exhaustion of local remedies Claim was dismissed because failure of exhaustion of local remedies

In taking up the case of one of its nationals, a state is in reality asserting its own right, the right to ensure in the person of its nationals respect for the rules of international law, this rule is necessarily limited to intervention on behalf of its own nationals…where the injury was done to the nationals of some other state, no claim to which such injury may give rise falls within the scope of the diplomatic protection which a state is entitled to afford nor can it give rise to a claim which that state is entitled to espouse. Lithuania is right in maintaining that Estonia must prove that at the time when the injury occurred which is alleged to involve the international responsibility of Lithuania the company suffering the injury possessed Estonian nationality [Since whether or not the company was or not Estonian was part of the merits, the court decided not to answer it, and let the answer to the merits]