This is a totally new situation for Germany: The Federal Republic faces an action at the International Court of Justice (ICJ) as a sole respondent for the first time ever – in proceedings brought by a state which has good relations with Germany but believes that its statehood is beeing disregarded and the property rights of its citizens violated. By accusing Germany of infringing international law, the Principality of Liechtenstein is taking the last diplomatic resort available to it. Some two years of consultations with German government bodies, including the Fed-eral Chancellery, the Foreign Office and the Federal Ministries of Finance and Justice, have failed to yield any result. Now it will be up to the International Court of Justice, the United Nations’ principal judicial organ, to reach a decision in order to close an unfinished chapter of German post-war history. In filing this application, Liechtenstein is relying on the law and its institutions and trusts that its generally friendly relationship with Germany shall in no way be impaired.

The dispute centres on the treatment of property owned by Liechtenstein citizens situated in the former Czechoslovakia. A deeper point at issue is the question whether the State of Liechtenstein – a sovereign state since 1806 and recognized as neutral by all parties to both world wars – should be considered along with its citizens as part of the German nation. This is how the Czech government has chosen to interpret the law, and it has also been the position of the German courts and the federal government since 1998. Thus the statehood of the Principality of Liechtenstein, never before in dispute, and the nationality of its citizens have both been called into question.

Expropriation in breach of international law

Background of the case: Numerous Liechtenstein citizens, including the family of the present ruler, Prince Hans-Adam II, owned extensive real estate, industrial property and works of art in pre-war Czechoslovakia, mostly in what is now the Czech Republic but partly also in the present Slovak Republic. Largely out of solidarity with pre-war Czechoslovakia, Liechtenstein is one of the few states that have never recognized the 1938 Munich Agreement between Germany, Italy, France and the United Kingdom, which required Czechoslovakia to cede the Sudetenland to the German Reich. From 1945 onwards, Liechtensteinian property in Czechoslovakia was confiscated by the new rulers under the “Beneš Decrees”. The then Czechoslovak government justified this expropriation of property without compensation by claiming that Liechtenstein, and hence its citizens, formed part of the German nation. The Principality of Liechtenstein and its subjects thus came within the scope of the expropriation decrees that applied to former German and Hungarian citizens in Czechoslovakia.

Liechtenstein’s neutrality was never in dispute

It is central to an understanding of the overall legal situation that the victorious powers in World War II never concluded a formal peace treaty with Germany. After the war was over, they helped themselves, partly by expropriating German property on foreign territory. In the “Settlement Convention” concluded in 1955 with France, the United Kingdom and the United States, the Federal Republic of Germany recognizes the unilateral actions taken by the victorious powers and undertakes to pay compensation to those whose property was confiscated for reparations purposes. If the parties to this Convention did indeed hold the view that the victorious powers were entitled to confiscate neutral Liechtensteinian property as reparations for the war – by treating it as if it were German “enemy” property – this would also commit the Federal Republic of Germany to compensate the Liechtenstein subjects whose assets had been expropriated.
Yet in fact, until recently the Federal Republic of Germany and the Principality of Liechtenstein were in agreement that the reparation clauses in the Settlement Convention did not apply to Liechtensteinian property. On that basis, Liechtenstein also refrained from claiming any compensation from the Federal Republic.

1998 change in Germany’s position

Much later in the mid-1990s, however, German courts denied legal redress in a dispute involving a painting from the collection of the Liechtenstein royal family which had been thought to have gone missing after the end of World War II but reappeared 45 years later in a Cologne exhibition. The courts based their ruling on the terms of the Settlement Convention covering war reparations. In a decision dated 28 January 1998, the Federal Constitutional Court confirmed the judgements of the lower courts and ruled that Liechtensteinian property could be used towards payment of war reparations. In other words, Germany recognizes that Liechtensteinian property has been used to settle German war-reparation debts to what is now the Czech Republic, but without compensating the parties affected.

Neither the official protest subsequently lodged by the Principality of Liechtenstein nor some two years of consultations between the two states via civil servants and experts have produced any satisfactory result. On the basis of the Federal Constitutional Court’s decision, Germany denies any liability under international law and refuses to compensate Liechtenstein and its citizens for the assets they have lost.

The Principality of Liechtenstein maintains that Germany is violating its rights of sovereignty. It believes the claim for compensation must apply not only to the painting by the Dutch master van Laer from the royal family’s collection (which triggered the dispute that went all the way to the Federal Constitutional Court), but to all the property of Liechtenstein and its citizens on the territory of former Czechoslovakia.

The ICJ has jurisdiction

Liechtenstein takes the view that the International Court of Justice has jurisdiction on the basis of the European Convention for the Peaceful Settlement of Disputes of 1957. This Convention came into force between Germany and Liechtenstein on 18 February 1980. The action brought by Liechtenstein falls within the time period covered by the Convention, since the sole object of the dispute is the legal position towards Liechtenstein which Germany adopted for the first time in 1998, and the resulting obligation on Germany’s part to pay compensation.

In a separate case independent of the Principality of Liechtenstein’s current application to the International Court of Justice, Prince Hans-Adam II of Liechtenstein, as a private individual, filed an application against the Federal Republic of Germany in the European Court of Human Rights in Strasbourg on 28 July 1998. This was the Prince’s response to the decision taken by Germany’s Federal Constitutional Court in January 1998. The Strasbourg court accepted the admissibility of this action on all counts in June 2000, and the case is now pending.

Vaduz/The Hague, 1 June 2001.

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