The UN’s top court ruled on Friday that Germany has immunity from foreign lawsuits by victims of the Nazi regime seeking compensation.
The 15-member International Court of Justice made the ruling by 12 to three.
It said Italy’s supreme court was wrong to allow claims from slave labourers and the victims of a 1944 massacre in Tuscany.
Under international law, states cannot be sued by individuals in national courts but only in international tribunals.
Berlin argued damages had been already paid to Italy under a 1961 treaty.
Italy said immunity should not apply to these international crimes.
In 2008, the country’s top court ordered the seizure of a German cultural centre near Lake Como in northern Italy to pay the claims.
The Hague-based ICJ is the UN’s highest judicial organ and settles disputes between states.
Its rulings are final and binding.