Sanctions Fallout

After Expropriation, German Businesses Seek Restitution from Russia

Franz Sedelmayer in Munich. Source: Andreas Labes forHandelsblatt
Franz Sedelmayer in Munich.
  • Why it matters

    Why it matters

    The Russian state claimed property owned by German businesses and refused to return it despite being called upon to do so by international courts.

  • Facts

    Facts

    • Last year, trade between Germany and Russia amounted to €76 billion.
    • Direct investments in Russia by German businesses amounted to €23 billion in 2012.
    • Germany is Russia’s third-most important trade partner, and Russia is the eleventh-most important trade partner for Germany.
  • Audio

    Audio

  • Pdf

A businessman from southern Germany fought for 20 years to reclaim millions of euros owed to him by the Russian state.

Franz Sedelmayer now specializes in multi-asset recovery and his expertise is hard won.

In the early 1990s, Mr. Sedelmayer set up a joint venture together with the state authorities importing goods. Business boomed and he was rewarded with a property by the city of St. Petersburg, formerly Leningrad. The property was confiscated and it took Mr. Sedelmayer 140 court visits and some creative detective work to recoup his losses.

He had been given a villa in St. Petersburg and he had spent a million euros renovating it. In 1994, President Boris Yeltsin confiscated it by presidential decree. An agreement between Russia and Germany in place at the time promised to compensate German businesses.

But Russia ignored the law and Mr. Sedelmayer brought his claim to an international arbitration court in Sweden which found he was owed $2.35 million (€1.7 million) in 1998.

Want to keep reading?

Subscribe today, and get access to distinguished coverage of Europe’s leading economy, from its No. 1 name in financial news: Handelsblatt.