The family of a Jewish woman from whom the Nazis forcibly removed a multimillion pound Impressionist painting may yet see the return of the work after a US court ruled in their favour.

Lilly Cassirer’s great-grandchildren, David and Ava Cassirer, have fought for 16 years for the restitution of Camille Pissarro’s ‘Rue Saint-Honoré, Après-midi, Effet de Pluie’ (1897). On Monday (10 July), the 9th US Circuit Court of Appeals in Pasadena, California revived the lawsuit against Madrid’s Thyssen-Bornemisza Museum, which had been dismissed by a US District Court Judge in 2015. The District Court had ruled that the Museum owned the painting under Spanish law.

Cassirer was compelled to sell the oil on canvas masterpiece, which has been valued at over $40 million (£41 million), for £280 to Nazi art appraisers in order to escape Germany for England in 1939. With the painting still missing, the German government paid her 120,000 marks for her loss in 1958.

It was not until 2001 that Cassirer’s family discovered the painting had been housed in the Thyssen-Bornemisza Collection since 1992 after a family friend was said to have seen the work in a Museum catalogue. The Cassirers filed a petition for the return of the painting in Spain in 2001 and when that failed they brought suit in the US in 2005.

The Thyssen-Bornemisza Museum had acquired the work as part of Baron Hans Heinrich Thyssen-Bornemisza’s $338 million (£262 million) collection in 1993. The Baron himself purchased it from Stephen Hahn, an art dealer in New York, for $275,000 (£214,000) in 1976. It is suggested that both the Pissarro and the wider Thyssen-Bornemisza collection were purchased at an undervalue.

According to the California appeals judge it was a “triable issue of fact” as to whether the Baron purchased the painting in good faith and whether the Museum knew the artwork was stolen when it acquired it from the Baron. The judge also held that Cassirer could still claim ownership rights despite the settlement she received from Germany in 1958.

The case will return to the US District Court in Los Angeles and the Cassirer family are said to be “very pleased” with the ruling. “This has been a scar they’ve had to deal with for generations”, their lawyer said.