Steinberg v Custodian of German Property

JurisdictionIsrael
CourtSupreme Court (Israel)
Israel, Supreme Court sitting as the High Court of Justice.

(Cheshin, Deputy-President; Agranat and Susmann JJ.)

Steinberg et Al.
and
Custodian of German Property.

International Arbitration — Award — Binding Effect of — Mixed Arbitral Tribunal as Competent Court — Effect of Award of Mixed Arbitral Tribunal as Evidence of Debt — Award Rendered in 1926 by Germano-Roumanian Mixed Arbitral Tribunal — Non-execution of — Duty of Israel Custodian of German Property as Regards Discharge of Debt.

The Facts.—On July 24, 1926, the Germano-Roumanian Mixed Arbitral Tribunal set up by the Treaty of Versailles of 1919 made an award in favour of the (above-named) applicant, by which Germany was ordered to pay him the sum of 48,000.00 gold marks plus costs and interest. It appears that the applicant attempted to collect this debt from the German State—first during the days of the Weimar Republic, later in the days of the Third Reich, and finally from the Federal Republic of Germany—but without success. In 1951 the two applicants emigrated to Israel and in 1956 the first applicant transferred all his rights under the award to his son, the second applicant. During all this period, both before and after the transfer, requests were made to the respondent, the Israel Custodian of German Property, to discharge the debt out of assets of the German State held by him, in accordance with the German Property Law of 1950, but the Custodian repeatedly refused to do so. The applicant now asked for an order calling on him to show cause why he should not discharge the debt due to the applicant under the award of the Mixed Arbitral Tribunal.

The German Property Law, 1950, provides in section 13 (a) that the Custodian shall not pay a debt due from a German, subject to the following exceptions: if the debt or obligation is proved to the full satisfaction of the Custodian, or under a judgment of a competent court; and then to the extent that the property of such German held by the Custodian is sufficient for that purpose.

Held: that the application must be dismissed. The Germano-Roumanian Mixed Arbitral Tribunal could not be considered a “competent court” for the purpose of the German Property Law. The issues of fact and of law, including the question of the binding force of the Award and the reason for its non-execution, should be tried in the usual way before the District Court.

The Court said (per Cheshin, Deputy-President): “In their first application to the Custodian the applicants...

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