US law protects the interests of the original owner of art unlike any other system of law. In the case law and statutes of many US jurisdictions, three main approaches to the question of the running of time under limitation legislation may be discerned:
(i)           an ‘actual discovery’ rule (as provided for in California);
(ii)          the ‘demand and refusal’ rule (applied by the New York courts); and
(iii)         the ‘discovery or due diligence’ rule (in most other jurisdictions).
In international property law, which governs the question of the law applicable to in rem relations, the principle of lex rei sitae, is widely recognised. According to this principle, the validity of the transfer of the tangible movable and its effect on the proprietary rights of the parties thereto and those claiming under them in respect thereof, are governed by the law of the country where the movable is at the time of the transfer (lex situs).
If the object is moved from one jurisdiction to another, this leads to a change in jurisdiction with regard to property law, with the consequence that the law of the new situs of the object is decisive concerning existing rights of possession and ownership, as well as other in rem rights. #litigation#art#law In accordance with the situs rule, the law of the new situs, also decides whether, under what conditions and with what effect rights in stolen property can be acquired.
There has been a noticeable change in US conflict laws as applied in cases over the past 15 years, signalling a gradual departure from the perceived stricture of the situs rule and toward a more flexible approach, that of the ’most significant relationship’ test.
When confronted with the possibility of a transfer under civil law, US courts have shown noticeable reluctance to apply foreign law to cases concerning stolen property.
In two cases, the landmark Menzel v. List and the De Weerth saga, the question of the transfer under foreign law was not even raised, facilitating the application of US law and ignoring the fact that both paintings had gone through Parisian galleries and had been kept there for some time prior to their subsequent transfer in New York.
In two other cases, Elicofon and Goldberg a potential transfer of title under civil law had been discussed, yet in both cases the courts in the end chose to apply the ‘most significant relationship’ test instead of the lex situs rule, thus enabling them to apply local state laws in both cases.