First they shot at the fishermen and due to its effect the two fishermen were killed. The first action was shooting. It was done while the Marines were in a ship under the flag of Italy. To shoot at someone with an intent to injure or kill has to be a crime anywhere. That act was done by two persons who were Italian citizens and standing on Italian on international waters as far as criminal jurisdiction is concerned and flying Italian flag. So they have to be tried by the Italian courts. In the case of Queen v. Keyne even though the German ship which collided with an English ship and consequently an English passenger died the verdict was equally divided the power of English court to try the German Captain even though the collision happened very much in English waters. So here since the event happened in international waters there cannot be any doubt about the jurisdiction of which court has to try the case. It is definitely Italian court.
It is the action which was against the law and hence the perpetrator is to be punished. Even the prosecution is telling the shooting was unprovoked as the fishermen were unarmed and quite far. So to shoot at unarmed person(s) itself is crime. That crime happened in virtual Italian soil and Italian courts has full authority to try the criminal case. Indian courts has no authority. The aggrieved parties can file a civil suit for compensation. (I am not in position to tell where it can be filed as of now-whether in Indian courts or Italian courts) The criminal case is to be dealt by Italian court only. In US no court of a particular state will take up a case which falls under the authority of another state.
Here the aggrieved parties who had co-pleaded in the case has since withdrawn their plea as the money they got was sufficient for them and no civil suit will ensue further. Only the criminal case is there still to be settled and it should be done in Italian courts.
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