The Zurich Court of Appeal has overturned a previous decision against private bank Julius Baer that a German government agency has the right to claim East German assets that went missing after the fall of the Berlin Wall.
The Bundesanstalt für vereinigungsbedingte Sonderaufgaben (BvS) (Federal Institution for Special Unification Tasks) made claims against Bank Cantrade, which was acquired in 2005 by Julius Baer from UBS through its deal to buy Bank Ehinger & Armand von Ernst.
BvS is seeking funds in the region of CHF97m (£74.7m, $98.1m, €88.4m) plus interest dating back to 2009 from the Swiss private bank.
Julius Baer confirmed on Wednesday that it is setting aside CHF153m to cover the demands but will re-appeal the decision in the Swiss Federal Supreme Court.
Previous decisions
In September 2014, BvS initiated legal proceedings in Zurich against Julius Baer as the new owner of Cantrade.
It claims unauthorised withdrawals were made from a Cantrade account between 1990 and 1992 by a foreign trade company established in what was then East Germany.
However, BvS states that it is the only entity with the authority to do this.
On 18 April 2018, the Zurich Court of Appeal ruled again in favour of Julius Baer and dismissed all claims by BvS.
But on 17 January 2019, the Swiss Federal Supreme Court partially ruled in favour of BvS, rejecting the verdict by the Zurich Court of Appeal, ordering it to reassess the case.
Finally, on 3 December 2019, the Zurich Court of Appeal affirmed BvS’ rightful claim on the fee of CHF97m plus interest dating back to 2009.
Claim for reimbursement
The Swiss private bank said: “As such appeal does not have a suspensive effect, Julius Baer has to preventatively book a provision for the full awarded amount of CHF153m.
“Julius Baer has always contested and continues contesting the claims of BvS.
“As previously disclosed, the claims of the BvS were notified to UBS AG under the terms of the 2005 transaction agreement with regard to representations and warranties granted in respect of the acquired entities and Julius Baer will claim for reimbursement of any finally awarded amount.”
UBS declined to comment on the matter.
