In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 12-3269

ELFRIEDE KORBER and CHRISTOPHER MARK,

Plaintiffs-Appellants,

v.

BUNDESREPUBLIK DEUTSCHLAND, et al.,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 08 C 6254 — Edmond E. Chang, Judge.

____________________

ARGUED JANUARY 6, 2014 — DECIDED JANUARY 9, 2014

____________________

Before EASTERBROOK, WILLIAMS, and TINDER, Circuit Judges.

EASTERBROOK, Circuit Judge. After Germany surrendered 

in May 1945, holders of bonds issued by public and private 

entities in that nation demanded repayment. Germany had 

suspended payment on many foreign-held bonds during the 

1930s, but some pre-war bonds were not due until the 1950s 

or 1960s. A multinational agreement among 21 creditor nations and the Federal Republic of Germany—which at the 
No. 12-3269 2

time meant the Länder that had been occupied by the United 

States, United Kingdom, and France—specified that Germany would pay valid debts outstanding on May 8, 1945. This 

pact, called the London Debt Agreement, gives priority to 

creditors who accept diminished payoffs. The Soviet Union 

and the German Democratic Republic (the Länder constituting East Germany) did not participate.

Contemporaneously with negotiation of the London Debt 

Agreement, West Germany enacted a Validation Law requiring holders of foreign debt instruments to submit them to 

panels that would determine whether the claims were genuine. Some bonds had been bought back in the markets but

stolen toward the end of the war; West Germany sought to 

ensure that these retired debt instruments were not paid a 

second time and that no counterfeit instruments would be 

paid.

In April 1953 the United States and West Germany 

agreed by treaty that foreign debts contracted before the end 

of World War II would be paid only if found by a validation 

panel to be legitimate. 4 U.S.T. 885 (1953). The parties agree 

that this treaty applies to Germany as reconstituted by the 

merger of East and West Germany in 1990. Holders had five 

years to submit their documents for validation by a panel in 

New York City. Any later claim for validation goes to an Examining Agency in Germany. The claimant must show a 

good reason for the delay and establish the instruments’ 

provenance. Decisions adverse to claimants are subject to 

judicial review in German courts. Article II of the Treaty 

adds that no instrument within the scope of the Treaty and 

Validation Law may be enforced unless it has first been validated by a panel in New York or Germany.
3 No. 12-3269

Plaintiffs filed this suit in 2008 under the international 

diversity jurisdiction, 28 U.S.C. §1332(a)(2), seeking to recover on bearer bonds that Germany had issued or guaranteed

before World War II began. One holder has never submitted 

the bonds to a validation panel. The other submitted them to 

a panel in Germany, which found them ineligible, and did 

not seek judicial review of that decision.

In response to defendants’ request for the suit’s dismissal, both plaintiffs contend that the Treaty is invalid because 

it takes their property without just compensation. The district court held that the Treaty is binding and that the suit, 

which seeks to collect on un-validated instruments, must be 

dismissed. The court added that the suit is barred by the 

statute of limitations, which the judge deemed to be a tenyear period drawn from Illinois law. (Illinois is the state in 

which the district court sits.) The court’s opinions cover

some other issues, such as whether payment of the bonds is 

a commercial activity for the purpose of the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602–11, and whether particular defendants were served with process, but those questions have dropped out. Appellees’ brief does not contend

that the defendants are immune under the FSIA or that service on any defendant was improper.

Despite the passage of time since the 1953 Treaty specified how bonds could be enforced, recent years have seen an 

uptick in claims seeking to recover in federal courts. Some 

holders have argued that their claims did not accrue until 

2010, when Germany made the final payments on bonds 

processed under the Agreement. These suits have been uniformly unsuccessful. See Fulwood v. Germany, 734 F.3d 72 (1st 

Cir. 2013); World Holdings, LLC v. Germany, 701 F.3d 641 (11th 
No. 12-3269 4

Cir. 2012); Mortimer Off Shore Services, Ltd. v. Germany, 615 

F.3d 97 (2d Cir. 2010). The first, second, and eleventh circuits 

have held that bondholders lose either because of the Treaty’s language or because the claims are time-barred. Our 

plaintiffs have raised constitutional arguments in an effort to 

circumvent the obstacles created by the Treaty and the other 

circuits’ decisions. The attempt to get around this sixty-yearold treaty is unavailing.

The Constitution’s fifth amendment does not forbid the 

taking of private property. Instead it requires just compensation for taken property. The Tucker Act, 28 U.S.C. 

§1491(a)(1), authorizes the Court of Federal Claims to award 

whatever compensation the Constitution requires. It follows 

that the 1953 Treaty cannot be unconstitutional as a prohibited taking. A person who thinks that the 1953 Treaty takes 

private property should use the Tucker Act remedy. See, 

e.g., Preseault v. ICC, 494 U.S. 1, 12–16 (1990); Ruckelshaus v. 

Monsanto Co., 467 U.S. 986, 1017–19 (1984); Regional Rail Reorganization Act Cases, 419 U.S. 102, 126–36 (1974).

It is tempting to end the opinion here, but in Dames & 

Moore v. Regan, 453 U.S. 654 (1981), the Supreme Court, 

while observing that claimants could resort to the Tucker 

Act, id. at 688–90, also stated that there is no constitutional 

obstacle to an international property settlement. The agreement contested in Dames & Moore, among the United States, 

Iran, and Algeria, resolved the dispute that began when diplomats and their families were taken hostage at the United 

States Embassy in Tehran. The agreement established the 

Iran–United States Claims Tribunal in The Hague. All claims 

(including contract claims that predated Iran’s 1979 revolution) must be submitted to the Tribunal, whose dispositions 
5 No. 12-3269

are final. Litigation of claims outside the Tribunal is forbidden. The Court observed that settlements of private claims 

are a traditional, and valid, part of peacemaking, see 453 U.S. 

at 679–80, and added that the United States’ power to strike 

such bargains with other nations may be exercised by executive agreement as well as by treaty.

Iran’s refusal to pay claims made by foreign nationals 

was not a taking by the United States; this nation does not 

guarantee other nations’ sovereign debt. Likewise Germany’s refusal to pay claims based on bonds it issued or guaranteed before the end of World War II cannot be thought a 

taking by the United States of America. That the United 

States and Germany agreed in 1953 to a process that will 

lead to payment of some but not all claims is an ordinary 

part of peacemaking and not an affront to the Constitution.

Diplomacy requires compromise. Many governments are 

reluctant to pay debts incurred by predecessors that have 

been overthrown in revolution (e.g., Iran) or lost a war (e.g., 

the Nazi regime in Germany). Indeed, the United States itself 

did not ensure payment of debts incurred within its own 

borders by the states that attempted to secede in 1861. The 

history summarized in Dames & Moore shows that diplomatic dispositions of private financial claims against other sovereigns, designed to facilitate the establishment of peaceful 

relations among nations, have occurred throughout American history. We cannot see any basis for a constitutional distinction between the diplomatic resolution of private claims 

against Iran and those against Germany.

Plaintiffs maintain that Germany has not carried out all 

its obligations under the 1953 Treaty. That contention should 

be made to the Department of State rather than to a district 
No. 12-3269 6

judge. The 1953 Treaty is not self-executing; the United 

States and West Germany made promises to each other, not 

directly to private citizens. Decisions such as Medellín v. Texas, 552 U.S. 491 (2008), show that private parties can be the 

intended beneficiaries of treaties without having a right to 

enforce them in court. Plaintiffs do not point to any language 

in the 1953 Treaty conferring enforcement rights on private 

parties; to the contrary, the Treaty forbids private suits based 

on non-validated claims. It is far from clear to us that Germany has fallen short of its commitments; Examining Agencies still exist in Germany, and judicial review of adverse decisions is available. But because this treaty is not selfexecuting, diplomatic rather than judicial channels are the 

appropriate ones for consideration of plaintiffs’ grievances.

According to plaintiffs, a judicial order requiring Germany to improve its validation process may issue under the Alien Tort Statute, 28 U.S.C. §1350, even if not directly under 

the 1953 Treaty. That contention did not survive Kiobel v. 

Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), which holds 

that §1350 cannot be used to contest the acts of foreign nations taken within their own borders. How Germany administers the validation process is for diplomats or German 

courts to consider.

Because plaintiffs lack validated claims, their suits must 

be dismissed. Lest silence invite suits on claims validated in 

coming years, we add that we agree with World Holdings, 701 

F.3d at 653–54, and the district court that the statute of limitations independently bars a judicial role in collection. Holders could have submitted their bonds for validation decades 

ago, whether or not they accepted the speed-for-amount 

tradeoff under the London Debt Agreement; those who de-
7 No. 12-3269

layed have only themselves to blame. Plaintiffs tell us that 

international law lacks a statute of limitations for the enforcement of sovereign debt—which is true but irrelevant. 

These bonds were issued under German law, and perhaps 

under U.S. law or other nations’ law too (they were designed 

for sale to non-German investors, and some of the instruments covered by the 1953 Treaty were traded on U.S. exchanges). The applicable periods of limitations are those 

provided by Germany, by jurisdictions in which the bonds 

were sold, and by agreement of the parties reflected in the 

instruments themselves. Litigation in the 2010s is far too late 

under any of those sources of law.

AFFIRMED