Is the Dispute between Germany and Italy over State Immunities Coming to an End (Despite Being Back at the ICJ)?

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For nearly two decades Germany and Italy have been embroiled in a dispute over the scope of State immunities under international law. The dispute which relates to the question of compensation for victims of crimes committed by Nazi forces in Italy or against Italian citizens, has recently been resubmitted by Germany to the International Court of Justice (ICJ). Germany initially requested that the Court grant provisional measures but as explained below, due to developments over the past few days, Germany withdrew that request and the oral hearings scheduled for this week were cancelled.

Three key judgments defined the evolution of the dispute. In 2004, the Italian Supreme Court of Cassation boldly read international law to mean that a State’s immunity from the jurisdiction of another State is not available when the action seeks compensation for harm suffered by victims of international crimes. In 2012, the International Court of Justice (ICJ) famously ruled that no such exception exist in customary international law. The Italian legislator fully complied with the ICJ’s ruling, inter alia by enabling the repeal of final judgments at variance with it. However, in 2014, the Italian Constitutional Court declared the ICJ’s finding incompatible with the fundamental constitutional principle of judicial protection of rights, which, in the Court’s view, takes on added force where alleged victims of international crimes have no other remedy available. As the Constitutional Court annulled the Law by which the Italian Parliament had sought to debar civil complaints against Germany, victims or their relatives resumed legal actions or started new ones. Recently, a few of them resulted in the attachment of real estate owned by Germany in Rome as the German Government – which understandably demands that its sovereign rights be respected – refused to pay court-ordered compensation. The impending sale of these properties at auction prompted Germany to take the case back to the ICJ, asking the Court to prevent such sale as a matter of urgency (Application instituting proceedings and request for provisional measures, hereafter “Application”, at 23-43). Although Germany’s move seems to signal re-escalation in this never-ending dispute, it could soon usher in long-awaited closure, without the ICJ having to rule on the matter again.

Little has changed since the ICJ’s original verdict, apart from the fact that Italy (but not Germany) became a party to the UN Convention on Jurisdictional Immunities of States and Their Property. Should the proceedings continue, the ICJ will most likely pass a second judgment against Italy – an outcome as predictable as it would be incapable of addressing the problem at its root for as long as the Italian Constitutional Court stands by its 2014 judgment. As divergent judicial pronouncements have led to a stalemate that is unlikely to be broken by a further ruling, governments can no longer postpone decisive action. The Italian Government has already taken an important step which, if followed by further concerted initiatives, could lead to the dispute being resolved without going through another judicial showdown.

Italy Pays

The day after Germany submitted the new case to the ICJ, the Italian Government enacted a Decree-Law which, among many other things, sets up a Fund for the reparation of injuries suffered by victims of war crimes and crimes against humanity involving the infringement of fundamental individual rights, committed by the Third Reich’s armed forces on Italian territory or against Italian citizens (Article 43 of Decree-Law No. 36 of 30 April 2022, for an English summary of which see Franzina). The Fund, which will have at its disposal a total amount of 55,424,000 euros for the period 2023-2026, will be operational as soon as the Government, through another decree to be adopted by 1 December 2022 at the latest, will have determined the procedures for accessing it and for the payment of the amounts due to the victims.

The Decree-Law was in the first place designed to protect Germany from non-recognition of immunity from execution. Its Article 43(3) makes judgments awarding compensation unenforceable until they become final (by way of derogation from Article 282 of the Italian Code of Civil Procedure, according to which first instance judgments are provisionally enforceable). The same provision further stipulates that execution proceedings based on such judgments are either barred or extinguished.

In its request for urgent provisional measures of protection, Germany demanded, first, that Italy pay the sum necessary to lift the attachments. The Decree-Law rendered those attachments void. Germany further requested the Court inhibit the taking of similar enforcement measures in the future. The Decree-Law removed this possibility altogether (unless the Italian Parliament fails to turn it into a fully-fledged Law within 60 days of its publication, which seems unlikely). Shortly after the ICJ had scheduled the hearings on provisional measures, Germany acknowledged that the steps taken by the Italian Government allowed the request to be withdrawn and the hearings were accordingly cancelled. Whether the Italian Government’s move will also lead to the termination of the proceedings is another, and a trickier, question.

Assurances of Repetition

The reason why it remains unclear whether the case will be withdrawn lies in the fact that the Decree-Law leaves the issue of immunity from jurisdiction untouched. This is indeed an area that is difficult to navigate without breaking the limits set by the Constitutional Court’s 2014 ruling. The Decree-Law actually makes the assertion of jurisdiction by Italian courts (in contravention to international law as set out by the ICJ in its 2012 judgment) a prerequisite for the operation of the newly-established Fund. Under Article 43(2), only individuals who secure a final judgment finding a violation and assessing the extent of the resulting damage may apply to the Fund. The same provision specifies that those who enter into out-of-court settlements are equally entitled to access the Fund, but this clearly does not solve the issue of non-recognition of immunity from jurisdiction.

What the Italian Government did so far falls short of appeasing Germany’s grievances. Germany is asking the ICJ not only to find that its rights have been systematically infringed since the Constitutional Court’s 2014 ruling, but also to compel Italy to offer “concrete and effective assurances and guarantees that violations of Germany’s sovereign immunity will not be repeated” (Application, at 22). Germany had made a similar request back in 2008, but the ICJ rejected it, classically arguing that there was “no reason to suppose that a State whose act or conduct has been declared wrongful by the Court will repeat that act or conduct in the future, since its good faith must be presumed” (Judgment, para. 138). As that trust was evidently misplaced, the ICJ may now be inclined to grant the request. But the Constitutional Court’s 2014 ruling itself complicates the matter.

By compelling the repetition of Italy’s wrongful act, that ruling makes assurances and guarantees of non-repetition respectively meaningless and impossible. In principle, the task of offering such assurances and guarantees would rest with the Parliament or the Government, but of course none of them can set aside the Constitutional Court’s verdict. The only genuine guarantee of non-repetition would then be a reversal of that judgment, which at present seems unlikely. Rumour has it that the 2014 decision did not enjoy wide support among the judges and that the Constitutional Court in its current composition would most likely decide the matter differently. But it would still be hard to overturn a judgment which, whether one likes it or not, stands firmly on important considerations of principle. At any rate, lower courts have so far failed to find reasons to refer the matter back to the Constitutional Court. Neither Parliament nor Government can push for change in their stead.

In a small booklet entitled Whether and to What Extent Domestic Law Can Set Limits to International Obligations of States, published in 1901, Giulio Diena (1865-1929), then Professor of international law in Siena, argued that although States may well act unlawfully through their courts,

States that afford their judicial organs the utmost independence in the exercise of their functions would themselves regard it as improper and unlawful to expect from another State that it interferes in the work of its own courts. The independence enjoyed by [domestic courts] undoubtedly contributes to raising their credit everywhere, constituting an effective guarantee of their impartiality towards everyone and conferring on the decisions issued by them a real authority, even in relation to foreign States (at 32).

These words are from a time when no international judicial apparatus existed and international law relied almost exclusively on domestic courts for principled enforcement. Today, as the World Court celebrates its centenary, domestic courts independent of governments remain a factor in the effectiveness of international law no less essential than in Diena’s time, and something that human rights law further underscores. Therefore, this may well be one of those cases where, in the International Law Commission’s words, “assurances and guarantees of non-repetition” would “not […] be appropriate, even if demanded” (at 91). The ICJ is unlikely to grant them precisely because of the constitutional impasse created by the Constitutional Court’s 2014 ruling – an impasse that could not be “ordered away” without compromising a principle, judicial independence, which international law undoubtedly cherishes.

Diplomacy and More Diplomacy

The Italo-German dispute has over time resulted in a configuration that somewhat jars with the idea of international and domestic courts as partners in the attempt to legally constrain governmental action. Here the opposite occurs: courts have seemingly settled on non-dialectical conflicting positions, whereas governments’ stances tend to converge in the effort to stabilize the legal framework of their mutual relations.

Since it would be extremely hard for either court to go back on their respective positions, and since the Constitutional Court holds the Italian Parliament and Government in check, the only party capable of bringing the unlawful act immediately to an end – however paradoxical this may seem – is the German Government. Its counterpart has already taken a bold step. It could not have done more without acting unconstitutionally. Germany, for its part, could waive its immunity in proceedings whose financial implications, after the adoption of the Decree-Law, would be borne exclusively by Italy. Such a waiver would affect Germany’s legal position with respect to a specific category of cases, allowing it to uphold immunity in all other circumstances: it would be a diplomatic move, not an abdication of principle. The waiver would be unlikely to result in an excessive burden for Germany, as the latter may de facto devolve its defence to the Italian government, which has now an even greater interest in intervening to soften the impact of compensation claims on public finances.

The cessation of the wrongful act resulting from Germany’s waiver of immunity (if it ever happens) would not render the action before the ICJ pointless, however. Germany also seeks “reparation for any injury caused through violations of Germany’s right to sovereign immunity” (Application, at 22). However, if the establishment of the Fund means that Italy is waiving all inter-state claims for compensation, then perhaps Germany could reciprocate by agreeing with Italy to discontinue the proceedings before the ICJ, thus forfeiting a sum that may not be exceedingly large, given that Italy now pays the reparations.

As may be recalled, at the time of the first proceedings before the ICJ, Italy – which had filed an ill-fated counterclaim in this regard – was adamant that “Germany ha[d] violated its obligations of reparation owed to Italian victims of the crimes committed by Nazi Germany during the Second World War” and that it had to “cease its wrongful conduct and offer effective and appropriate reparation to these victims” (Counter-memorial of Italy, at 128). What is its position now? The setting up of the Fund does not in itself ensure that Italy will not seek to recover money from Germany someday (compare Palchetti, at 46-47). But perhaps the Decree-Law offers a clue in this respect, where it claims to “ensure continuity to the Agreement between the Italian Republic and the Federal Republic of Germany made executive by Presidential Decree No. 1263 of 14 April 1963”. This is a reference to one of the two lump-sum agreements concluded by Germany and Italy on 2 June 1961, the one whose Article 2 provides that

The Italian Government shall indemnify the Federal Republic of Germany and German natural or legal persons for any possible judicial proceedings or other legal action by Italian natural or legal persons in relation to […] claims [based on rights and circumstances which arose during the period from 1 September 1939 to 8 May 1945] (ICJ’s translation, 2012 judgment, at para. 24).

Italy has consistently denied that such agreements settled (save to a modest extent) the issue of reparations for crimes committed by Nazi Germany in Italy or against Italians. But it cannot be excluded that the Italian Government reviewed its positions to finally reach a compromise.

It may even have gone too far in this direction. The Decree-Law, at Article 43(6), mandates domestic courts to declare ex officio inadmissible all eligible complaints not filed within 30 days of the decree’s entry into force, i.e. by 1 June 2022. Considering that there is a line of case-law in Italy which views actions for damages arising from international crimes as not capable of being subject to prescription, such a tight timeframe could easily lead to a referral of the rules governing the operation of the Fund to the Constitutional Court. At any rate, setting a less draconian deadline (say six months or a year) when turning the Decree-Law into a Law would be fairer, would mitigate risk of annulment by the Constitutional Court, and possibly avert further troubles.

 

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Hoffmann Tamás says

May 11, 2022

Dear Dr. Gradoni,

Thank you for your illuminating analysis! Could you please clarify something?
You write that "At any rate, lower courts have so far failed to find reasons to refer the matter back to the Constitutional Court. Neither Parliament nor Government can push for change in their stead."

However, surely the Italian Parliament could adopt again the 2013 law which then would be inevitably considered by the Constitutional Court. Do you think that is a likely scenario?

Lorenzo Gradoni says

May 11, 2022

Dear Tamas (if I may), the Parliament could reiterate the 2013 Law - theoretically - but since the Constitutional Court declared it null and void in 2014, the President of the Republic would perhaps exercise his power to withhold the Law's enactment and ask the Parliament to reconsider. It's a highly unlikely scenario. What I wanted to say is that the political branch has no direct avenue for bringing the case back to the Constitutional Court. And - to come back to your point - walking the indirect route of resuscitating the 2013 Law would be fraught with problems - the Parliament would not lightly defy the Constitutional Court's authority; and if it does, the Court will have one more reason to stick to its 2014 ruling.