The Italian Constitutional Court’s new decision on state immunity and the ICJ Germany vs Italy No. 2

On 21 July 2023, the Italian Constitutional Court issued a new decision on state immunity that could bring the proceeding between Germany and Italy currently pending before the International Court of Justice (ICJ) to conclusion. This post unpacks the decision and its broader impact on immunity in international law, showing that the judgment does not resolve the incompatible legal positions at the core of the dispute. The Constitutional Court validates the termination of all claims for compensation for Nazi crimes, and simultaneously upholds its controversial stance on Germany’s immunity.

The pursuit for justice for atrocities committed during World War II (WWII) is an issue that rests at the heart of many of us whose ancestors have been deported, ill-treated or killed at the hands of Fascist and Nazi troops due to their religion, disability, ethnicity, or political views. This sentiment was not eased by the 1961 Bonn Agreements, under which Germany paid a forfeit sum to Italy as final settlement of war reparations, whose criteria were so restrictive that benefitted only few former deportees.

The details of the judicial saga that followed are widely known. In its 2004 Ferrini case, the Italian Supreme Court of Cassation ruled that foreign states do not enjoy jurisdictional immunity from actions in compensation for harms deriving from atrocities. Subsequent decisions by Italian tribunals affirmed that this ‘humanitarian exception’ to immunity rule is progressively consolidating as customary law. To oppose this, Germany brought a case against Italy before the ICJ (Germany v. Italy No. 1), leading to the Court’s judgment in 2012, which found Italy in breach of customary law on sovereign immunity. For a short while the issue seemed to be resolved; Italy became party to the not-yet-in-force UN Convention on Jurisdictional Immunities of States and Their Property, passed Law No. 5/2013 to codify the effect of the ICJ judgment, and the Court of Cassation embraced the ICJ’s decision.

In 2014, however, the Italian Constitutional Court declared that the ICJ interpretation of immunity from foreign civil jurisdiction and Law No. 5/2013 clashed with Italian constitutional principles. The Court held that state immunity cannot result in the absolute sacrifice of individuals’ fundamental right to judicial protection. In particular, there is no jurisdictional immunity if victims have no other way to receive justice for serious violations of the universal values of human rights and dignity, such atrocities, that go beyond individual states’ interests.

From then on, the Court of Cassation consistently confirmed states’ lack of jurisdictional immunity in such cases, and held that enforcement immunity only shields them from execution over properties with a public, institutional or diplomatic function, while measures of constraint can be applied to foreign properties without public purpose. While most were against Germany, with German lands, hotels, and commercial credits targeted for execution, there were also cases unrelated to WWII brought against other countries, such as Serbia. Foreign judgments against other states, such as Iran, were also recognised and executed by seizing their properties on the Italian territory. Recognitions include the exequatur of Germany-owned Villa Vigoni in Lake Como based on old judgments from Greek courts condemning Germany for the Distomo massacre of 10 June 1944. The Court of Cassation excluded execution on Villa Vigoni due to its public purpose, but reiterated the validity of the foreign judgment against Germany.

The case that came before the Constitutional Court was initiated by heirs of two victims of inhuman treatment, arrest, deportation and detention to a concentration camp. In enforcing a previous decision on the merits, Rome’s judge of the execution ordered execution over German properties in Rome, namely the buildings of the German Institute of Culture, the German Historical Institute, and the Evangelical Lutheran Church. Enforcement immunity was not deemed applicable because Germany – which did not participate in the proceedings – failed to prove the public purpose of these properties. Understandably frustrated by this and other cases, Germany turned once again to the ICJ in April 2022 (Germany vs Italy No. 2), seeking Italy’s condemnation, assurance of ‘non-repetition’, and urgent provisional measures to prevent the sale at public auction of its properties.

Meanwhile, the Italian government had been looking at how to keep good relationships with Germany while recognising victims’ rights to compensation without undermining the Constitutional Court’s stance. The very next day, it introduced a Decree-Law (later converted into law) establishing a fund for reparations for war crimes and crimes against humanity committed by the Third Reich’s armed forces on Italian territory or against Italian citizens between September 1st, 1939 and May 8, 1945. Under this law, recalling the Bonn Agreement, Italy assumed full responsibility for compensating successful applicants in merit proceedings against Germany. The law set short time limits for merit proceedings and fund applications, prevented the initiation of new enforcement proceedings over German assets, and automatically extinguished existing ones. As a result, Germany withdrew its request for provisional measures. A ministerial decree outlining the procedure to access the fund should have been adopted by 1 December 2022, but was delayed due to a change of government and shifting priorities. Time limits were extended accordingly.

Prompted by the applicants, the Rome’s Tribunal challenged the new law’s constitutionality before the Italian Constitutional Court. The Tribunal questioned the conformity of the indefinite elimination of both pending and new enforcement proceedings with constitutional provisions on access to justice. It also questioned the compatibility with the principle of equality of parties, since the applicants would be immediately prejudiced by the proceeding’s extinction without the possibility of accessing the fund given the failure to adopt the necessary ministerial decree. The Greek region of Sterea Ellada, a claimant in the Distomo massacre proceeding, intervened in the case, pointing out that while the converted law extinguished all executive proceedings, including those executing foreign judgments, compensation through the fund was only envisaged for Italian citizens.

On June 28, 2023 the Italian government finally issued the implementing ministerial decree outlining how to access the fund; the Constitutional Court decided on the matter on July 4, 2023 (published on July 21). The Court found the law proportionate and compliant with the Constitution, ruling that the government reasonably balanced the constitutional principles of access to justice and respect for international obligations and treaties.

The Court reasoned as follows. First, it reaffirmed that Germany’s assets with public purpose enjoy immunity from enforcement, but Germany itself does not enjoy immunity from jurisdiction because that would prevent victims from getting justice for atrocities. Once again, the Court accepted the international customary norm on jurisdictional immunity for iure imperii acts, but explicitly excluded its operativity in the Italian legal system for delicta imperii, i.e. crimes committed in violation of international norms of ius cogens. This humanitarian exception constitutes a ‘derogation’ to the rule on immunity that was affirmed in the Constitutional Court’s own judgment in 2014. On the point, the Court ingeniously explained that its 2014 judgment did not review the ICJ’s interpretation of the scope of the customary rule on foreign states’ jurisdictional immunity. Instead, it reviewed the constitutional compatibility of the ‘effects’ of the internal provision derived from such customary rule, finding that they were in contrast with the supreme constitutional principles of the ‘right to a judge’ and protection of inviolable fundamental rights of the person, jointly summarised in the fundamental right to human dignity, which operates as a ‘counter-limit’.

The present case, conversely, did not challenge immunity, but the constitutional compatibility of the new legislation establishing the compensation fund. The Constitutional Court found that the law has no detrimental effects on justice. The law gives victims a full and unconditional subjective right to compensation in ‘complete satisfaction of the claim for damages’, whose economic burden is exceptionally translated from Germany (‘the original debtor’) to Italy. The Court found that this solution ‘reconciles … the jurisdictional protection of the victims of the aforementioned war crimes and the respect of the specific international agreements (Bonn agreement of 1961),’ striking a ‘not unreasonable balance’ between these constitutional principles. The fund was considered an ‘adequate alternative safeguard’ equivalent to judicial execution, which compensates for the automatic extinction of enforcement proceedings, and indeed offers greater protection to claimants, who would otherwise struggle to obtain satisfaction by executing against state assets, especially public purpose ones.

This decision seemingly extinguishes the casus belli of Germany vs Italy No. 2. The combination of the Constitutional Court’s decision and the government’s action means that Germany will, de facto, be held immune from paying further compensation for WWII crimes. The law reconciles diplomatic relations and victim interests, without undermining the 2014 constitutional decision. The Constitutional Court managed to approve the law without contradicting itself.

Nonetheless, some core issues remains unresolved from an international law perspective. For both Germany and the ICJ, Italy’s stance on immunity inevitably remains as problematic as it was in 2004 and 2014. As Gradoni previously pointed out, the assertion of jurisdiction by Italian courts is a prerequisite for the operation of the new fund itself, which claimants can access only after securing a final judgment on the merits. The new law indemnifies German assets (both private and public) against execution, but inherently denies Germany’s jurisdictional immunity. The constitutional decision is also more about respecting treaty obligations than immunity, on which the Court reiterates its own 2014 jurisprudence which explicitly objects to a customary norm on jurisdictional immunity for delicta imperii.

Germany may decide to insist on a judgement on breach of immunity from jurisdiction in Germany vs Italy No. 2. However, doing so would be at the risk of jeopardising the advantage on material liabilities brought by the fund. It may also result in a setback in relations, after Italy has shown good faith and set aside other suggestions, such as a joint Italy-Germany reparation fund. Furthermore, the law already shields Germany from facing further actions in practice, since the set deadline to start proceedings on the merits has now expired. Nonetheless, the question remains open regarding the constitutionality of such restrictive time limits, which disregard the preclusion of statutory limitation for international crimes under the Italian legal system (an issue that was not raised in this constitutional proceeding). This raises questions about the genuine delivery of justice, in the context of the government’s prolonged inertia on the ministerial decree outlining how to access the fund, and the general public’s limited awareness about the opportunity.

Another issue the Constitutional Court did not review because it fell outside the scope of the original question is that of differentiated treatment, raised by Sterea Ellada. Non-Italian applicants are precluded from both seizing German properties and accessing the fund. For Greeks to receive compensation for Nazi crimes, Greece should either establish a similar fund, reach an agreement with Germany on a joint fund or else, or successfully challenge the Italian law through a new proceeding. Nonetheless, this does not affect other foreign judgments seeking compensation for fundamental rights violations unrelated to WWII, which can still be enforced over foreign assets in Italy.

The Constitutional Court delivered a persuasive decision on the questions that were asked, and remained coherent with its previous judgment and Italian constitutional values. This decision may offer a closure to Germany vs Italy No. 2, but the assertion of domestic jurisdiction and exceptions to customary norms on immunity may impact other contexts, including Ukraine’s confiscation of Russian assets, and the ICJ dispute between Canada and Iran. Writing on this blog in 2021, Joseph Weiler predicted that ‘sooner or later sovereign immunity will no longer provide a shield to grave violations of human rights/jus cogens and the Italian decision could be an important element in shifting customary law in that direction’; while the ICJ may disentangle from such intricacies in Germany vs Italy No. 2, state practice may forge ahead.