Etablissements Allart Rousseau v Germany

The Facts.This was a claim under paragraphs 1 and 4 of Article 1 of Chapter 10 of the Convention on the Settlement of Matters Arising out of the War and Occupation, 19521954,1 by a

The statement of facts by the Commission was as follows: In application of Article 12 of Chapter Ten of the Convention on the Settlement of Matters Arising out of the War and the Occupation, the Compagnie Gnrale des Industries TextilesSocit Anonyme des tablissements Allart Rousseau at Roubaixappealed against a decision of the Bundesamt [an abbreviated reference to the Federal Restitution Office] of August 20, 1958, which dismissed the complainant's successive applications of November 28, 1955, and January 9, 1957, for compensation for damage, restitution of property, restoration of rights and interests by virtue of Article 1 of the above-mentioned Chapter Ten.

The appeal of September 15, 1958, registered with the Commission on September 18, 1958, was formulated and filed under the conditions prescribed by the applicable provisions; the Arbitral Commission has thus been effectively appealed to pursuant to Article 6, Part II, of its Charter annexed to the Convention.

The appeal was followed by an additional pleading of November 21, 1958 (supplementary note of November 7, 1958), to which the defendant answered by pleading of January 24, 1959.

The procedure was completed by a reply of February 16, 1959 (supplementary note of February 17, 1959), followed by a rejoinder of March 18, 1959.

Before the Bundesamt, in the application of November 28, 1955, it was submitted that the Federal Republic be ordered to pay:

• (1) 744,447 15s. 6d. plus 5 per cent. interest as from July 22, 1942, less 34,897 paid on June 18, 1955;

• (2) 588,000,000 Frs. plus 5 per cent. interest as from July 22, 1942;

• (3) 4.574.680.40 Frs. plus 5 per cent. interest as from July 22, 1942;

to restitute:

• (4) 80 Wola shares, or, if impossible, the counter-value of these shares, viz., 3,600,000 Frs. plus 5 per cent. interest as from January 23, 1941;

alternatively, to pay into a free banking account in DM the counter-value plus interest of the amounts referred to above.

The subsequent application of January 9, 1957, moreover, aimed at the restitution of a list of securities stated in detail, or, failing this, the payment of their value according to expert opinion plus interest as from April 1, 1943.

Modifying, if not the nature, at least the amount, of its claim by a new method of calculation, the complainant, by a last pleading of February 20, 1958, requested, primarily, that the Federal Republic should pay 23,147,804.13 DM, with 4 per cent. interest: (a) for 23,147,804.13 DM as from July 15, 1955; (b) for 23,557,110.78 DM from July 22, 1942 to July 14, 1955.

This sum of 23,147,804.13 DM is obtained by a series of calculations on the basis of the rate of exchange of the currencies concerned in July 1942:

counter-value of a gross sum of 12,278,380.96 RM, which includes the counter-value of the pound sterling and French francs listed above, but also other liquid assets;

conversion of the pound sterling into Reichsmark; then of the Reichsmark into French francs at the rate of 1 RM= 20 French frs.; later, of the French francs into U.S. dollars at a rate of 1 dollar=43.80 French frs.; amount in 19425,606,566.65 dollars;

finally, counter-value of this dollar amount at the present rate of exchange, viz., 1 dollar=4.2017 DM, totalling 23,557,110.78 DM, less 409,306.65 DM already paid.

In its written pleadings before the Arbitral Commission as well as at the oral hearing, the complainant repeated the total amount of its claims, in particular the payment of the amount of 23,147,804.13 DM, arrived at as mentioned above (reference is made to the supplementary note of November 7, 1958), the 80 Wola shares, the securities enumerated in an annexed list, as well as its alternative submissions.

(a) The complainant, the Socit Anonyme des tablissements Allart Rousseau et Cie, [a] company established under French law, with its head office at Roubaix, had a subsidiary company at Lodz, Poland, which was entered in the Lodz trade register as a subsidiary company but had its own capital and administration.

On the termination of the war in Poland (1939, this subsidiary company was the subject of successive and cumulative measures of custodianship by the German authorities on two grounds: (1) the control of the whole of the Polish economy by the Haupttreuhandstelle Ost [Head Trust Agency for the East] (abbreviated H.T.O.); (2) blocking of enemy property by the Reich Commissioner for the Treatment of Enemy Property.

Dr. Heintze, a textile expert, was first appointed custodian (Treuhnder) by the H.T.O., later on custodian by decision of the Oberlandesgericht [Superior District Court] of Posen of September 24, 1940, by virtue of the Ordinance on the Treatment of Enemy Properties of January 15, 1940.

This plurality of administrative measures which constantly gave rise to differences continued until March 1942, when the Reich Commissioner for Enemy Property lifted the enemy property custodianship.

However, in 1943 the firm was again placed under custodianship, and, the provisional administration by the H.T.O. having been lifted in the meantime, Dr. Heintze was once again appointed enemy property custodian.

The Reich Commissioner for Enemy Property, informed by Dr. Heintze of the existence of important liquid capital (6,500,000 RM), about half of which appeared in the current accounts of the H.T.O., gave full authority to invest this capital at interest and to liquidate the accounts with the H.T.O.

Nevertheless, the H.T.O. continued to draw from the subsidiary company at Lodz considerable sums which, after deduction of some payments, amounted to a total of 12,278,380.96 RM in July 1942; these sums were transferred to the H.T.O. account with the Reichshauptkasse [Head Cash Office of the Reich] and gave rise to the principal claim of 23,147,804.13 RM.

(b...