Decision no. 88/2006

In 1938, the applied for real-estate property was owned by F. B.-B, a Jewish industrial magnate and patron of the arts; he was also the chairman of the administrative board of the “Austrian Sugar Industry Incorporation” (ÖZAG). F. B.-B. left Austria shortly before 13 March 1938 and emigrated to Switzerland. In the course of a criminal prosecution for tax offences against the ÖZAG and its functionaries, initiated immediately after the “Anschluss”, he had to sell his entire property in order to be able to pay the alleged tax debts. The real-estate property had been acquired for 250.000,- Reichsmark by the German Reich for its Railways; F. B.-B’s ÖZAG-stocks were acquired by the German industrialist C. A. The balance tax-demand of 300.000,- Reichsmark still remained pen after the sale and auctioning of F. B.-B.’s art collections.

In 1947, the heirs after F. B.-B, who had died in Switzerland at the end of 1945, applied for the restitution of the real-estate property, which in the meanwhile was being used by the Austrian Federal Railways. In 1950, the Restitution Commission Vienna decided that, subject to the consent of the occupying powers, the real-estate property was to be restituted. The procedure could only be continued in 1955, since this approval had not been reached. In 1949, restitution proceedings had been initiated with regard to the establishment of the rights to the shares to the former ÖZAG and with regard to their re-erection. Finally, in 1956, at the suggestion of the Republic of Austria, both proceedings were included in one settlement and the time-barred tax demand formerly amounting to 300.000,- Reichsmark was included in the settlement with the Republic of Austria. The heirs after F. B.-B. withdrew their application for restitution of the real-estate property and paid the Republic of Austria an amount of 1,5 million Schilling, which covered also the tax arrears. The Republic of Austria, on the other hand, withdrew all her claims to the ÖZAG, which allowed for the reestablishment of the corporation.

The Arbitration Panel had to examine whether the settlement, which had been concluded in 1956, presents a case of “extreme injustice” in accordance with Sec. 32 of the General Settlement Fund Law. During the settlement procedures the Republic of Austria took advantage of the possibility to pressure the claimants. Especially through the procedures regarding the ÖZAG, the claimants were led into a settlement, which was favourable to the Republic of Austria. Additionally, the Republic of Austria assumed in the settlement that the restitution of the real-estate property was unsure, even though a restitution had to be expected as certain in the restitution proceedings. The Arbitration Panel establishes that since the renting proceeds had not been included and time barred tax debts had been included in the settlement, the settlement amount was much lower than what would have been awarded to the claimants by the Restitution Commission. Due to these considerations, the settlement was to be classified as being “extremely unjust”.

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