|High Court (England and Wales)|
Note: What makes this judgment so extraordinary is that it combines, with great perception, lucidity, and wit, a fascinating crime story with the novelty of a High Court judgment becoming the first judicial authority on a provision of the German Civil Code.
The crime story centres around a priceless painting in Dutch mannerist style. The setting includes treasure looting in Soviet occupied Germany immediately after the Second World War and the murky circles of Moscow art smugglers in the last years of Communist rule. The painting links the Dukal family of Saxe-Coburg-Gotha with the Soviet secret service, "Big Mamma" (the wife of the Togolese Ambassador to Moscow), shady dealings of a Panamese company, paid informants, and one of the world's leading auction houses.
Comparative and conflicts lawyers will be thrilled by the fact that this English judgment is the first reported court decision on § 221 of the German Civil Code on limitation of proprietary actions when a third party acquires possession of the property. In spite of its age (almost exactly one hundred years) and obvious relevance to the recovery of stolen art, not a single decision by any German court on this provision seems to have been reported. Thus, a decision by the High Court of England and Wales, which includes a full discussion of German academic writing on the subject, becomes the first judicial authority on a section of this venerable codification of Civil Law.
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|IN THE HIGH COURT OF JUSTICE||Case No: 1993 C 3428|
|QUEEN'S BENCH DIVISION||Case No: 1997 G 185|
|BEFORE||MR JUSTICE MOSES|
||CITY OF GOTHA
(A Body Corporate)
(an unlimited company)
|(2) COBERT FINANCE S.A.|
||THE FEDERAL REPUBLIC OF GERMANY||Plaintiff
|- and -|
(an unlimited company)
|(2) COBERT FINANCE S.A.|
Mr Alexander Layton QC and Miss Monica Carss-Frisk (instructed by Messrs Frere Cholmeley Bischoff ) appeared on behalf of the Plaintiffs.
Mr Michael Brindle QC and Mr Bankim Thanki (instructed by Messrs Herbert Smith) appeared on behalf of the second Defendants.
Date of Judgment: 9 September 1998
Limitation of actions/prescription (Verjährung) for proprietary claims; whether misappropriation triggers fresh period for limitation of proprietary restitution claim (yes); confiscation and expropriation by Soviet Military Administration in Germany; administrative law regulations and decisions (Verordnung and Verfügung); private law foundation (privatrechtliche Stiftung), seat and dissolution; effect on extraterritorial property.
Bürgerliches Gesetzbuch (Civil Code, BGB) §§ 80, 87 (foundations), 195, 198, 221 (limitation of actions), 858, 861, 868 (possession), 986 (possession and proprietary claim for restitution)
The judgment contains full or partial translations of §§ 87 (1), 221, 858 (1) and (2), 868, 986 BGB.
Conflict of laws; whether dissolution of private law foundation amounts to expropriation (depends on intention); whether extraterritorial passing of property within universal succession of property under German law can be recognized in England (yes); whether English or German limitation of action rules apply to proprietary claim when title is subject to German law but property locaced in England (German limitation rules); whether in conflict of limitation of action rules in cases of double actionability English tort claim limitation rules supersede German proprietary claim limitation rules (no); whether Defendant deliberately concealing Plaintiff's right to action would override limitation of actions under foreign law on grounds of public policy (yes); incidental question; proprietary restitution, tracing of title.
Foreign Limitation Periods Act 1984 Sec. 1, Sec. 2, Sec. 4
Private International Law (Miscellaneous Provisions) Act 1995, Sec. 10
Limitation of Actions Act 1980, Sec. 4
Return of Cultural Objects Regulations 1994 (SI 1994 No 501), based on Council Directive 93/7/EEC of 15th March 1993 on the Return of Cultural Objects Unlawfully Removed from the Territory of a Member State.
Adams v. National Bank of Greece and Athens S.A.  2 QB 59
Arab Monetary Fund v. Hashim  1 Lloyds Rep. 543
Attorney-General of New Zealand v. Ortiz  1AC 20
Bank Voor Handel En Scheepvaart N.V. v. Slatford  1 QB 248
Bumper Corporation v. Commissioner of Police of the Metropolis  1WLR 1362
Carl Zeiss Stiftung v. Rayner & Keeler (No.3) [l979] Ch.506 at 528
The Cintas Foundation Incorporated v. Sothebys Unlimited and Fondarm International Establishment (Unreported, 11 February 1995)
Durham v. T & N PLC and others (unreported, 1 May 1996, CA)
The Estate of Fuld, decd. (No. 3)  P. 675
Jones v. Trollope Colls Cementation Overseas Ltd (Times Law Reports 26 January 1990)
National Bank of Greece and Athens S.A v. Metliss  A.C. 509
Oppenheimer v. Cattermole  AC 249
Pirelli General Cable Works Ltd. v. Oscar Faber & Partners  2 AC 1
Princess Paley Olga v. Weisz  1 KB 718
Sheldon v. R.H.M. Outhwaite (Underwriting Agencies) Ltd  1 AC 102
United States v. Inkley  QB 255
Williams & Humbert Ltd v. W & H Trade Marks(Jersey) Ltd  AC 369
Winkworth v. Christie Manson and Woods Limited and anr.  Ch. 496
Reported by Dr. Michael Carl, Solicitor and Rechtsanwalt.
In 1603 Joachim Wtewael painted The Holy Family with Saints John and Elizabeth; at their side are three angels playing music. A young callipygian St John supports a book read by his mother, St Elizabeth. Flaunting the style of Correggio which, like other Dutch artists before him, the painter had admired during his travels in Italy, he crowds the copper surface of only 21 x 16 cm. with descending putti, fragments of a Corinthian column and classical ruins in the background. The picture is a notable example of Dutch mannerism, a style which Wtewael adopted when he returned to Utrecht in parallel to others in Haarlem who had responded to the Italian influence.
The size of the painting is not merely such as to permit its owner to enjoy its sensuous and spiritual delights by holding it for closer examination. A cabinet painting attracts the thief and smuggler. As in the pillage of Rome, so Gibbon records, "just preference" was given to that which "contained the greatest value in the smallest compass and weight". At the end of the Second World War it disappeared from the collection in the gallery of the Ducal Family of Saxe-Coburg-Gotha in the city of Gotha. It was smuggled from Moscow in the mid 1980s, emerged briefly in West Berlin in 1987, and disappeared, only to reappear when offered for sale by Sothebys in 1992.
The plaintiffs claim the return of the painting in conversion against a Panamanian Corporation, Cobert Finance S.A. ("Cobert"). An earlier action was brought by the City of Gotha against Sothebys. The two actions have been consolidated. Sothebys has taken no further part in the proceedings pending resolution of the dispute between the plaintiffs and Cobert. The Federal Republic of Germany claims ownership of the painting. The City of Gotha asserts a possessory title to it. The plaintiffs claim declaratory relief, an order for delivery up and/or damages on the grounds that Cobert converted the painting by taking constructive delivery of it in March 1989, by consigning it to Sothebys for sale at that time, by offering it for sale through Sothebys to the City of Gotha in October 1991 and/or by demanding its return from Sothebys in August 1993.
The case is as packed with different characters and issues as the images in the painting. I have been introduced to SMERSH, trophy brigades, the art smugglers of Moscow and "Big Mamma" in order to resolve disputes of fact and to the learning of commentators on the German civil code in order to resolve disputes of German law. The two crucial disputes are:-
(I) Whether the Federal Republic of Germany can establish title to the painting; and
(II) Whether, if it can, its claim is time-barred under the German law of limitation. Under Section I relating to the Federal Republic of Germanys claims to title, the following issues arise:-
I.1 Whether as a matter of fact it can be established that the painting was in Thüringia in 1945 and 1946;
I.2 Whether title to the painting passed to the Land of Thüringia by virtue of the confiscation police order of 6 July 1945 read with the expropriation Law of 9 October 1945 or, if the painting was still in Thüringia in July 1946, by the operation of the Law of 24 July 1946;
I.3 Whether title to the painting passed to the Land of Thüringia by virtue of the dissolution of the Art Foundation on 14 October 1950;
I.4 Whether an English Court will recognise or enforce the Federal Republic of Germanys title to the painting under German law;
I.5 Whether the arrival of the painting in West Berlin, allegedly via East Germany in 1987 perfects an inchoate expropriation;
I.6 Whether the City of Gotha has a right to possession of the painting. Under Section II in relation to limitation, the following issues arise:-
II.1 (dealt with in this judgment after the findings of fact in relation to title) Whether as a matter of fact the painting was misappropriated by a subsequent possessor after it had been stolen from Gotha;
II.2 Whether the German limitation period is relevant pursuant to Section 1 of The Foreign Limitation Periods Act 1984;
II.3 Whether, if German law is relevant, the right to recovery is statute barred under German law;
II.4 Whether pursuant to Section 2(1) of
the Foreign Limitation Periods Act 1984 I should disapply German law, if
it bars the claim, on the grounds that it conflicts with English public
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