There have been a number of interesting recent developments in the area of restitution, from the UK, to Brussels and the West Coast of the United States. In this article we take you through a selection of these developments and their impact on the 
international art market. 

Rue St. Honore, apres midi, effet de pluie painted by Pissarro in 1987 has been the subject of a Californian Central District Court case brought by David Cassirer, as the ancestor to Lilly Cassirer Neubauer, against the Thyssen- Bornemisza Collection Foundation (“the Thyssen) which forms part of the well-known Thyssen National Musuem in Madrid. This case was brought in California with the assistance of the Jewish Federation of San Diego County but was the subject of Spanish and Swiss law, rather than California law. 

Lilly inherited the painting in 1926 from a relative and in 1939, as a Jew facing persecution in Germany, she was forced to transfer the painting to a Nazi art appraiser in order for her and her husband to obtain exit visas to flee the country. Lilly was paid a small sum for the painting that fell well below its actual value and which was paid into a blocked account that she could not access. The painting was then sold on a number of times in the following years. After the war, Lilly filed a claim for the painting and a decision was published in 1954 that confirmed that Lilly was the owner of the painting. 

Believing that the painting had been lost or destroyed, in 1958 she entered into a settlement agreement with Germany (although she did not waive her right to seek restitution of the painting).  

Unbeknownst to Lilly, the painting had appeared in the United States in 1951 and remained there with various collectors until 1976 when it was publicly exhibited by the Stephen Hahn Gallery in New York and was sold to the Baron Hans Heinrich Thyssen-
Bornemisza (“the Baron”) for USD 300,000, which the court found to be a fair market value for the painting at the time. The painting was kept as part of the Baron’s collections in Lugano, Switzerland until 1992 when it (along with a number of other works) 
was the subject of a loan agreement with Spain which resulted in the painting’s public display in Spain in 1992. In 1993 Spain agreed to purchase the collection on loan. 

The questions for the court to consider were limited to two: (1) did the Baron possess the painting in good faith? and (2) did the Museum have actual knowledge that the painting was stolen property? 

In order to address the first question, the court had to look to Swiss law to determine whether the Baron acquired title to the painting when in Switzerland. This involved a consideration of whether the Baron exercised the diligence required by the circumstances, when he acquired the painting. The court found that there was sufficient suspicious circumstances or “red flags” such that the Baron had a duty to investigate the seller’s title. Specifically, the court determined that the following 
circumstances, considered together, should have caused a sophisticated art collector like the Baron to conduct additional inquiries: (1) the presence of intentionally removed labels and a torn label showing that the painting had been in Berlin; (2) minimal provenance information provided by the Stephen Hahn Gallery including no information from the WW2 era; (3) the well-known history of Nazi looting of fine art; (4) the fact that Pissarro paintings were often looted by the Nazis.

After considering the expert evidence on the issues, the court concluded that there were sufficiently suspicious circumstances to trigger a duty to investigate under Swiss Law and they found no evidence that the Baron took any steps to allay suspicions that he may have had. The result was that the Baron did not possess the painting in good 
faith and therefore did not acquire good title to the painting under Swiss law, which in turn meant that he did not pass title to the Thyssen in 1993. 

The court then had to consider whether the Thyssen acquired lawful ownership of the painting. Under Spain’s laws of acquisitive prescription an item must be subject to 3 years of uninterrupted possession in good faith, or 6 years “without any other condition”, 
save for when the person claiming ownership is an accessory to the theft of the item. The second question for the court to consider was whether the Thyssen was an ‘accessory’ under Spanish law, and in particular whether the Thyssen had actual 
knowledge that the painting was stolen. 

The court found that the Thyssen lacked actual knowledge that the painting was stolen, on a number of basis, including that (1) save for the 1954 decision, there was no published information about Lilly’s prior ownership of the painting or that the Nazi’s had looted it; (2) Spain obtained legal opinions from reputable law firms to ensure that the 
Baron held good title and that the conveyance was lawful; (3) it was not aware of any adverse title claims that arose after the painting was publicly exhibited; and (4) the price paid for the entire collection was reasonable. The court found that these factors, amongst others, taken together might have been sufficient to raise suspicions but they fell short of demonstrating that the Thyssen had actual knowledge that the painting had been stolen. The court also found that the Baron did not have actual knowledge that the painting was stolen. The court concluded that as a result of the Thyssen’s lack of actual knowledge that the painting was stolen, it could not be an accessory to the theft.

Somewhat reluctantly the court concluded that the Thyssen is the lawful owner of the painting and the claim by Cassirer failed. The finding in this case will have been unsatisfactory for many. The case highlights the ongoing difficulties in restitution claims 
and the tension between, on the one hand, what the court describes as the ‘moral commitments’ of sovereign nations as set out in the Washington Principles and the Terezin Declaration, and on the other hand the parties’ legal rights and responsibilities that the court is required to enforce.

A story with a similar background came to light in August this year, this time involving Christie’s New York and the FBI art crime team. During the Nazi occupation in 1933, Lucie Mayer-Fuld’s bank accounts were seized and she too became subject to an ‘exit tax’ to leave Germany. She subsequently left Germany in 1939 with few belongings. In 1940, an auction house in Berlin listed for sale various items from her estate and determined that the proceeds from the auction would be put towards satisfying her 
exit tax. Two bronze vases were sold at the auction to an antiques dealer in Berlin. 

The vases surfaced at an auction in London in 1997 and then later in 2000 at another auction before becoming part of a private collection in the United States. The vases were then recently consigned for sale at Christie’s New York. As part of their due diligence process, including checking the lost art databases, Christie’s discovered that the pair of vases were the unrestituted property of Lucie. Christie’s worked with the FBI art crime team to return the vases which culminated in a repatriation ceremony at the US Embassy in Berlin on 1 August 2019. This story demonstrates the significant 
practical use of the lost art databases and thorough due diligence.

Aside from these cases, there have been several developments in restitution legislation.

The European Parliament passed a resolution calling for the European Commission to improve the legal framework for the cross-border restitution of art and cultural goods looted in armed conflicts and wars. 

The resolution means that the commission is required to review the proposals for a pan-European meta-data-base of looted art, funding for provenance research, the establishment of alternative dispute resolution mechanisms and exemptions from statutes of limitations for Nazi-looted art claims. The implementation of European legislation could highlight the opposition of some Eastern European countries to the implementation of the Washington Principles.

Closer to home, parliament has passed legislation to repeal the cut-off date for Holocaust era restitution claims to national museums and galleries. The Holocaust (Return of Cultural Objects) (Amendment) Bill removes the sunset clause in the 2009 legislation and will allow national institutions to remove objects from their collections that are found to have been stolen during the Nazi era. The bill has been widely welcomed as a demonstration of the UK’s efforts to identify and return Nazi looted art. The 2009 act has already been used to deal with a handful of claims including three Meissen figurines that were returned by the Victoria and Albert Museum in 2014 to the heirs of Emma Budge and a John Constable painting that was returned by the Tate in 2015 to an anonymous claimant.