IIn its judgment dated June 29, 2022 (Case No. IV ZR 110/21), the Federal Court of Justice upheld the decision of the Cologne Court of Appeal. The Cologne Court of Appeal had previously held in its judgment of April 22, 2021, file no. 24 U 77/20, that English law regarding the compulsory portion is not applicable due to a violation of German public policy if a UK national (with the closest connection to England) with habitual residence in Germany elects British law to govern "succession as a whole" pursuant to Art. 22 of the European Succession Regulation.
In the facts underlying the decision, the testator, who had English citizenship and had lived in Germany for over 50 years, had elected English law to govern succession as a whole. The plaintiff, who was adopted by the testator and excluded from the succession by the will claimed the compulsory portion.
Federal Court of Justice confirmed that, pursuant to Art. 22 (1), 83 (4) of the European Succession Regulation (also referred to as Brussels IV) a British citizen may elect UK law to govern succession. It then analysed the question whether the application of English law violates German public policy in this specific case and thus should be deemed inapplicable (Art. 35 EuErbVO):
"Contrary to the view of the revision, the application of English law is, at least in the case at issue here, obviously incompatible with the German public policy (Article 35 EuErbVO). This is because English law is in such serious contradiction to the constitutionally guaranteed distribution of the estate under German law that its application in the case here is unacceptable. This has the consequence that it does not apply here."
"As an institutional guarantee, the right to a compulsory portion is part of the existence of German public policy. In its landmark decision of April 19, 2005 (BVerfGE 112, 332 et seq.), the Federal Constitutional Court clarified that the right of the testator's children to a compulsory portion is protected by reference to the guarantee of the right to inherit under Article 14.1 sentence 1 in conjunction with Article 6.1 of the Basic Law. Article 6 (1) of the Basic Law, the right of the testator's children to a compulsory portion has the character of a fundamental right in the sense of a minimum economic share in the testator's estate which is in principle irrevocable and independent of need. This follows from family solidarity and the family-protecting function of the right to a compulsory portion derived from this (see BVerfGE loc. cit. [juris para. 64 ff.]). Article 6.1 of the Basic Law protects the relationship between the testator and his or her children as a lifelong community within which parents and children are not only entitled but also obliged to assume responsibility for one another both materially and personally."
According to the Federal Court of Justice, a corresponding guarantee does not exist in English law. The relevant provisions of the Inheritance Act 1975 do not contain a claim to a compulsory portion comparable to German law. It merely provided for financial compensation in the sense of a claim to maintenance by descendants, which, however, was at the discretion of the court and depended on numerous circumstances, such as the neediness of the child. A further prerequisite for such a claim to compensation is that the decedent had his last "domicile", which is not to be equated with the German concept of residence, in England or Wales. As a result, under English law there was neither a claim to a compulsory portion independent of need nor a comparable claim to compensation in the specific case, which was incompatible with the basic ideas of German compulsory portion law and thus with domestic public policy.
