The Court of Appeal concluded that the district judge erred in holding that Swiss law, rather than New York law, applied. Consequently, if, contrary to the holding of the district judge, the Drawing was stolen or otherwise unlawfully taken from Grunbaum, that circumstance would affect the validity of Bakalar's title. The district judge found that the Grunbaum heirs had failed to produce "any concrete evidence that the Nazis looted the Drawing or that it was otherwise taken from Grunbaum." The Court of Appeal's reading of the record suggests that there may be such evidence, and that the district judge, by applying Swiss Law, erred in placing the burden of proof on the Grunbaum heirs in this regard. New York law places the burden on Bakalar, the current possessor, to prove that the Drawing was not stolen. Hence the Court of Appeal remanded the case for further proceedings, including, if necessary, a new trial.
To read the judgement, click here
To read the judgement of 2 September 2008 from the US District Court Southern District of New York which this ruling overturns, click here