Adolf Lüchinger, Rechtsprechung der schweizerischen Gerichte im Umfeld des nationalsozialistischen Unrechtsregimes auf dem Gebiet des Privatrechts, unter Einschluss des internationalen Zivilprozess- und Vollstreckungsrechts (Schwerpunkt Ordre public), Unabhängige Expertenkommission Schweiz – Zweiter Weltkrieg (Ed.), Die Schweiz, der Nationalsozialismus und das Recht, Vol. II: Privatrecht, Zurich 2001, pp. 67 – 124
Adolf Lüchinger – Rechtsprechung im Umfeld des nationalsozialistischen Unrechtsregimes
Background
In certain cases with international relevance, Swiss courts have to apply foreign law and enable the enforcement of foreign court judgements. Neither of these things may be done without careful examination. Both the application of foreign law and the enforcement of foreign judgements are subject to the superseding principles of the public policy doctrine. The same applies for example to the providing of legal assistance to a foreign state, the extradition of a person to a foreign state and administrative assistance in child abduction cases. The public policy doctrine bars the domestic observance of foreign law which is incompatible with the domestic legal system, contradicting its meaning and spirit. In such cases the foreign law is not applied, and is replaced if necessary by domestic law provisions. Decisions have upheld that the public policy doctrine applies when the domestic population would feel its sense of justice intolerably violated, if fundamental formal or substantive provisions of the Swiss legal system are disregarded, and where Swiss legal concepts necessarily have to take precedence over foreign law. The concept of ordre public is not static, as it can evolve depending on changes in Swiss or foreign law. Accordingly, the manner of concretization by the Federal Supreme Court is of great importance. The Federal Supreme Court has to deal particularly often with the question of ordre public in connection with appeals of decisions of international arbitration tribunals, because legislators have only recognized extremely restrictive grounds for appealing such decisions. For a broader discussion respecting international arbitration please refer to the Anthology’s Cluster on International Arbitration.
It is obvious that the ordre public gained considerable importance in the process of the Federal Supreme Court’s addressing of legal matters connected with the perditious National Socialist regime. The study cited below was written in 1996 under the mandate of the Bergier Commission tasked by the Parliament and Government of the Swiss Confederation to investigate Switzerland’s economic and financial relations with the belligerent powers in the Second World War, including particularly services provided by neutral Switzerland to Germany and Italy. This mandate included assessing actions on the part of the judiciary in relation to the National Socialist terror regime. Private law-focused investigations examined in particular trade in foreign securities, German assets in Switzerland, dormant assets, trade in looted cultural assets and the business activities of Swiss life insurers in Germany. In the area of public law, investigations were carried out on neutrality law, property protections, international legal responsibility, legal aspects of the Swiss refugee policy and reparation issues. Attitudes expressed by legal scholars and the judiciary towards the Nazi regime were examined as well. The Federal Supreme Court’s application of the public policy doctrine clause in private law is the subject of the summary below of an article by former Federal Judge Adolf Lüchinger.
Summary
The Federal Supreme Court was confronted with the effects of the illegitimate National Socialist terror regime before, during and after the Second World War, particularly in connection with the recognition and enforcement of German court judgements and the assessment of complaints which were to be adjudicated under German law pursuant to provisions of conflict of laws. The author begins by pointing out that until 1989, there were many gaps in private international law. The fact that public policy doctrine formed part of the Swiss legal system however was entirely undisputed even before that time. In contrast to national law, agreements concluded with other states on the mutual recognition and enforcement of judicial decisions – such as the Swiss-German enforcement agreement of 1929 – contained an explicit but only generally formulated clause upholding the public policy doctrine. Referring to case law going far back, the Federal Supreme Court further elaborated the doctrine, saying that generally descriptive terms do not suffice. The court’s function extends beyond positive law because of the idea of justice on which its own legal system is based. Or as the Federal Supreme Court found, the judges’ sense of values or justice is decisive. One and the same legal relationship should not be treated differently in different countries if possible, thus the public policy exception is applied more cautiously in the enforcement of judgements than in the assessment of actions.
In an early decision in 1938, the Federal Supreme Court cited the public policy doctrine in refusing to enforce a German ruling obliging the publishing house Thevag to refund payment received from Universum-Film-Aktiengesellschaft (UFA) for transferring filming rights to the work of a Jewish author and for his collaboration on the screenplay. The film company believed it had been entitled to withdraw from the contract because after 1933 it was no longer possible to show a film in which a Jewish person was involved. The German court had upheld the film company’s complaint because National Socialist ideology held that only ethnic Germans were to be treated as having full legal status so the involvement of a Jew in the film was legally not possible, it was argued. This was found to be equivalent to fulfilment of the contract being rendered impossible due to illness or death. The Federal Supreme Court did not consider this to be a mere question of interpretation of a contract but rather an application of the new laws for Jews which conflicted with one of the foundational principles of the Swiss legal system: equality of all citizens before the law. On the same grounds, the High Court of the canton of Zurich found that Jews being barred from inheritance under an ordinance attached to the German Reich Citizenship Act of 1941 violated the public policy doctrine. German foreign exchange laws also gave the Federal Supreme Court frequent cause for invoking the primacy of the public policy doctrine. Under these laws, sending payments abroad, i.e. to foreign creditors, was prohibited so as to benefit the German economy and the German state. In the view of the Federal Supreme Court, this constituted an expropriation-like encroachment on creditors’ rights, which conflicts with the recognized principles underlying the Swiss legal system. The Federal Supreme Court also had to address confiscation measures against Jews imposed by the German Reich. A malt factory in the Czech Republic with the Jewish owner, Heynau, supplied malt to a brewery in Switzerland in 1939, sending an invoice. In the meantime the company was placed under forced administration, and the claim was assigned to Böhmische Unionsbank to prevent collection of the credit balance by the company owner who remained in Switzerland. After the brewery deposited the amount owed, both the owner remaining in Switzerland and the bank sued for restitution. The Federal Supreme Court protected the Jewish owner’s complaint, citing public policy doctrine because forced administration conflicts sharply with both the principle of recognition of private property, which bars expropriation by the state without compensation, and the principle of equality of rights, which prohibits encroachment on the property rights of an individual solely on the basis of race. The author then cites the problematic federal court rulings on the expropriation of insurance claims: The German Jewish person Elkan had taken out a life insurance policy with the German branch of the Swiss Life Insurance and Pension Company in 1931. Elkan’s assets were confiscated in 1943 based on the decree attached to the German Reich Citizenship Act and the Rentenanstalt pensions institution paid the surrender value of the life insurance policy out to the Chief Finance President, thus considering the insurance policy to have lapsed. Elkan survived concentration camp internment and in 1949 sued the Rentenanstalt in Switzerland for non-fulfilment of its obligations. In a 1953 ruling the Federal Supreme Court found that a violation of the public policy doctrine was not warranted. Confiscation of the plaintiff’s property on the basis of the Nazi racial legislation would not have been enforceable in Switzerland, but the fact could not be overlooked that the repayment had been made in accordance with German law, as this would amount to a deprivation of the insurance company’s rights that would not be justified by the injustice done to the plaintiff. The Federal Supreme Court considered it impossible to invoke the primacy of public policy doctrine in relation to a legal intervention in a foreign country under the laws of that country. Apparently, the German Federal Supreme Court, the Supreme Court of New York and the English House of Lords had made the same decision at that time. The author takes the contrasting view that the public policy doctrine can be invoked after all with regard to the effects of laws. The hardship suffered by the insurance company in this case would have been a consequence of the special risks associated with operating a branch office in Nazi Germany. In a different constellation, the Federal Supreme Court corrected its earlier, inaccurate ruling. In that case, under a federal decree of 1941 a Swiss woman who had entered into a marriage valid in Switzerland with a foreigner lost her Swiss citizenship unless she were to become stateless because she could not acquire the citizenship of her foreign husband. Jews of German origin residing abroad lost their German citizenship under the decree attached to the German Reich Citizenship Act. In the Madeleine Levita-Mühlstein decision of 1946 the Federal Supreme Court ruled that depriving the Jewish husband of German citizenship breached the public policy doctrine, meaning that under Swiss law he had not lost his citizenship and therefore the Swiss wife had not become stateless through the marriage. In the Rosenthal ruling of 1948, however, the Federal Supreme Court then correctly recognized that the reason for the husband’s statelessness was irrelevant, which is why the wife was able to retain Swiss citizenship after the marriage. In summary, the author attests to the Federal Supreme Court (and other Swiss courts) an “attitude of not closing its eyes to the injustices under National Socialism, endeavouring instead to protect the rights of those persecuted by the Nazi regime to the extent possible.”