Decision no. 515/2009

The two neighbouring properties, with a total area of around 8,200 m², comprised a villa originating from the early 19th century, several outbuildings and a park. In 1938, these and several nearby construction areas with an area of around 17,000 m² were owned by the heirs of the deceased industrialist Isador M. – Käthe B., Marie K., Anna Maria M., Heinrich Mathias M., Konrad Michael M., Lorenz Sebastian M and Stephan M. Due to an obligation to the Austrian National Bank arising from a bill of exchange, a lien for 775,000 Schilling had been recorded on the property since 1929. By 1938, merely a portion of the accumulated interest had been paid. The capital claim, however, remained unpaid.

From 1938, the Reichsbank, which had taken over the business transactions of the Austrian National Bank after the Anschluss, tried to bring in a portion of the claim through the sale of the properties. As this, with the exception of one property, this was unsuccessful, from 1941 the Reichsbank planned to take over the ownership of the remaining properties. After the owners, who were considered Jews pursuant to the “Nuremberg Laws”, had fled abroad the properties fell to the German Reich on the basis of the Eleventh Decree to the Reich Citizenship Law, which in turn transferred them to the Reichsbank for their estimated value of 300,000 Reichsmark to be offset against the claim.

In 1945, the ownership title to the properties was recorded for the Austrian National Bank, which sold one of the presently requested properties comprising the villa and a large part of the park to the Republic of Austria. In the subsequent years the listed building, which was severely dilapidated, was renovated at great expense.

In 1950, the heirs of Isidor M. concluded a settlement with the Austrian National Bank. In this settlement the waived the restitution of the properties that were seized in 1941 – including the property which had been sold to the Republic in 1948. In a counter move the Austrian National Bank waived the remainder of the claim from the obligation arising from the bill of exchange against the owners and returned to them a property consisting of a construction area. One of the requested partial areas, which was transferred into public property by the Austrian National Bank in 1951, was also included in the settlement.

The Arbitration Panel therefore had to examine whether the settlement constituted an “extreme injustice”. In doing so, it was to be taken into account that in the case of a restitution, the previous owners would not only have had to pay back the estimated value of the properties which had been offset against the original claim of the Austrian National Bank in 1944 and a large part of the renovation expenses. In addition to this, the Austrian National Bank had a remaining claim of at least 440,000 Schilling against the owners on the basis of which the bank could have subjected the properties to an auctioning procedure at any time. Due to the high costs that would be connected to the restitution and the risk of not achieving the full value of the properties by auction, in the view of the previous owners and/or their heirs the settlement seemed economically understandable. The Arbitration Panel was also unable to determine that their freedom of contract had been decisively restricted at the time of the settlement.  For this reason, the restitution could not be recommended.

With regards to the second requested property and the two partial areas, the Arbitration Panel had to examine whether a seizure in the meaning of the General Settlement Fund Law was present. A prerequisite for a seizure is the causal connection between the persecution and the sale of the properties.

The City of Vienna had already conducted negotiations with the previous owners regarding the transfer of the two partial areas for widening the street, which had been in planning since 1930. Furthermore, in July 1938, both parties also agreed on the sale of the property. As the purchase price was adequate, the proceeds of the sale were received in their entirety by the owners and the negotiations had already commenced before 1938, the Arbitration Panel did not deem there to be a causal connection between the undisputed persecution of the owners and the sale of the property.

Therefore, the Arbitration Panel was also unable to recommend the restitution of this property which was sold to the Republic of Austria in 1954 and two partial areas which remained in the ownership of the City of Vienna.