Dmitry

Sotheby’s and Dmitry Rybolovlev Will Come to the Table on Art Fraud Case + Other Stories


Art Industry News is a daily digest of the most consequential developments coming out of the art world and art market. Here’s what you need to know on this Thursday, March 9.

NEED-TO-READ

Turkey Loses Bid to Keep Artifact – The U.S. court of appeals’s second circuit has upheld a district court’s decision that Turkey is not the owner of a 6,000-year-old marble idol. Called “the Stargazer,” the 5,000-year-old antiquity had been in the U.S. for 50 years before Turkey tried to have it restituted, and was on view at the Met. Turkey has been fighting auction house Christie’s and the piece’s private owner, Michael Steinhardt, for years. (Courthouse News)

Miriam Cahn Painting Sparks Controversy – Palais de Tokyo has responded to a viral ruckus on Twitter about a work in Cahn’s solo show at the museum. Some viewers misinterpreted a work that depicts a prisoner being forced to perform a sexual act while in bondage, mistaking the prisoner as a child, and reading the work as pedophilic. The museum clarified that the painting depicts adults and is a comment on the Ukraine war, in particular the atrocities that took place in Bucha. “The repetition of violence during wars is not intended to shock but to denounce,” said Cahn. (Twitter) (ARTnews)

Sotheby’s and Dmitry Rybolovlev Agree to Mediation – Attorneys for both sides have heeded a judge’s advice to avoid an “expensive, risky, and potentially embarrassing” trial to decide whether the auction house “aided and abetted” an alleged fraud perpetrated by Swiss art dealer Yves Bouvier. The charges center on the propriety of the price markups Bouvier made on a series of multimillion dollar art transactions for masterpieces by Leonardo da Vinci, Amedeo Modigliani, Pablo Picasso and others. Mediation will proceed under purview of a different judge than the one originally appointed however, as Magistrate Judge Lehrburger’s niece happens to be a lawyer at Sotheby’s law firm. (Press release)

Venus Williams and Adam Pendleton Stage Auction – The two stars will stage a fundraising event at Pace’s New York gallery to raise money for the Nina Simone Childhood Home preservation project. A benefit gala will be accompanied by online auction at  Sotheby’s. The auction will include works donated by major international artists, including by Mary Weatherford, Stanley Whitney, Robert Longo, and Cecily Brown. (Press release)

MOVERS & SHAKERS

Phillips New Now Sale Brings in $8.4 Million – Works by Jean-Michel Basquiat, John Chamberlain, and Jason Boyd Kinsella were among the highlights of the New York sale on March 8. Susan Chen’s He Loves Me, He Loves Me Not, sold for more than three times its estimate, at $35,560, and sale records were achieved for Daisy Dodd-Noble and Tammy Nguyen. (Press release)

French Government to Consider Impact of French Tax Hike – France’s committee of professional art galleries has begun to create an impact study of a proposed tax hike. An E.U.-wide rule, which was quietly approved last April and will not take effect until 2025, could impose a 20 percent sales tax on artworks. The news has rattled the French art market, where art sales and the market’s boom have benefitted from a reduced tax rate of 5.5 percent. The working group is concerned that it will lead to an artificial inflation of prices, the penalization of artists, and fewer museum acquisitions. (Press release)

Yayoi Kusama to Debut New Infinity Room – A new Instagram-appealing “Infinity Room” by the nonagenarian artist is slated to open this May at David Zwirner Gallery in New York. The exhibition, titled “I Spend Each Day Embracing Flowers” marks the ten-year anniversary of Kusama exhibiting with Zwirner, and is the artist’s largest to date. (ARTnews)

FOR ART’S SAKE

National Portrait Gallery to Display Mural Honoring Women – Artists Jann Haworth and Liberty Blake have been commissioned for a massive work featuring 130 female luminaries of British art and culture. Titled Work in Progress, the massive piece is modeled after the famed Beatles album cover for Sgt. Pepper’s Lonely Hearts Club Band, and includes silhouettes of undersung women throughout history, from the 19th century abolitionist Ellen Craft to nurse Dame Elizabeth Anionwu. (Guardian)

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A U.S. Judge Dealt a Partial Victory to Sotheby’s in a Long-Running Fraud Case Brought by Russian Billionaire Dmitry Rybolovlev


A U.S. District Court judge ruled largely in favor of Sotheby’s in its efforts to dismiss Russian billionaire Dmitry Rybolovlev’s lawsuit against the auction house. The case is part of the art collector’s years-long legal battle with Swiss art dealer Yves Bouvier, whom Rybolovlev says defrauded him of $1 billion in inflated art deals, and claims that Sotheby’s played a role.

The plaintiff, which is named as Accent Delight International Ltd., a holding company controlled by Rybolovlev, argued that the auction house “aided and abetted Bouvier in committing fraud and breaching his fiduciary duties,” according to a summary from the judge. Specifically, Sotheby’s was said to have helped Bouvier acquire 15 works of art for which Rybolovlev paid in excess of $1 billion—hundreds of millions more than Bouvier had paid. 

While Sotheby’s won dismissal of most of the fraud claims, it still could face some issues at trial, namely on the question of whether Sotheby’s aided Bouvier’s allegedly fraudulent sale of Leonardo da Vinci’s Salvatore Mundi. Bouvier acquired the work for $83 million in 2013 and then immediately sold it to Rybolovlev for $127 million. In 2017, Rybolovlev auctioned the work at Christie’s, where it sold for a stunning $450 million—becoming the most expensive work ever sold at auction. (It was reportedly bought by Saudi Arabian royal Mohammed bin Salman Al Saud.)

Rybolovlev also said that Sotheby’s aided Bouvier’s allegedly fraudulent sales of Rene Magritte’s Le Domaine d’Arnheim and Gustav Klimt’s Wasserschlangen II, as well Amedeo Modigliani’s Tête.

A composite image of the Salvator Mundibefore and after restoration. The work and its controversial attribution to Leonardo da Vinci is the subject of the documentary film The Lost Leonardo, directed by Andreas Koefoed. Photo courtesy of Sony Pictures.

A composite image of the Salvator Mundi before and after restoration. The work and its controversial attribution to Leonardo da Vinci is the subject of the documentary film The Lost Leonardo, directed by Andreas Koefoed. Photo courtesy of Sony Pictures.

“Sotheby’s is pleased that the court’s decision on summary judgment dismissed the majority of plaintiffs’ claims for lack of evidence,” a representative for the auction house told Midnight Publishing Group News in a statement. “The court also rejected plaintiff’s own motion for summary judgment in its entirety. Sotheby’s will continue to defend this case vigorously and looks forward to prevailing on the remainder of the case at trial.”

Rybolovlev’s attorney, Dan Kornstein, said in a statement that the judge, Jesse Furman, “carefully analyzed the facts and agreed with many of our arguments. Although not all transactions involving Sotheby’s survived the summary judgment, our remaining claims account for over $200 million of damages inflicted to our clients. These are very important episodes of the case, and we are looking forward to jury trial.”

Representatives for Bouvier, who is not a party to this lawsuit, did not comment on the ruling.

Judge Furman wrote a recap of the dispute before laying out the reasoning for his ruling, noting that between 2002 and 2014 Rybolovlev spent approximately $2 billion to acquire a world-class art collection, comprised of masterpieces by the likes of Leonardo da Vinci, Henri de Toulouse-Lautrec, Henri Matisse, “and other greats.”

“At some point thereafter, they discovered that Yves Bouvier, an art broker who assisted in acquiring the works, had cheated them by buying the works himself for one price and charging them another price—millions or tens of millions of dollars higher. That discovery has spawned litigation around the world, mostly between plaintiffs and Bouvier, but some involving others. This case is in the latter category.”

Rybolovlev asked the court to strike the entirety of a deposition of Bouvier taken in Switzerland, arguing that Bouvier’s oral testimony is inadmissible in part because he relied on pre-written answers. The judge largely denied that claim.

Bouvier has argued at various points that he wasn’t acting as Rybolovlev’s agent, but instead bought the paintings on his own and resold them to him, which would potentially eliminate a contractual or fiduciary obligation.

Sotheby’s also successfully requested that part of the testimony of another expert witness for the plaintiffs, art dealer Guy Stair-Sainty be blocked. However, Rybolovlev’s request to bar testimony from a Gurr-Johns expert acting on behalf of Sotheby’s was denied.

Perhaps tellingly, the judge included a line toward the end of the ruling, noting that, for now, “the court is of the view that the parties should try to settle this case without the need for a trial that would be expensive, risky, and potentially embarrassing to both sides.”

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Yves Bouvier Declares ‘Complete Victory’ After a Prosecutor Dismissed Russian Billionaire Dmitry Rybolovlev’s Charges Against Him


Swiss businessman Yves Bouvier has claimed “complete victory” in the seemingly never-ending legal saga between him and Russian billionaire Dmitry Rybolovlev after a Geneva prosecutor dismissed the final remaining criminal complaints against Bouvier.

The lead Swiss prosecutor, Yves Bertossa, confirmed that Bouvier committed no fraud, mismanagement, breach of trust, nor money laundering, according to a statement shared with Midnight Publishing Group News by representatives for Bouvier. The news was first reported by The Art Newspaper.

“Today marks the end of a six-year nightmare,” Bouvier said in the statement. “For reasons that had nothing to do with my art dealing activities, an oligarch tried and failed to destroy me, mobilizing his extraordinary financial resources and influence.” Bouvier added that Rybolovlev tried “to asphyxiate me financially by launching bogus lawsuits all over the world.”

Bouvier is now working on a “tell-all” book about the international conflict, according to his representative, and has initiated what could amount to up to $1 billion in countersuit proceedings, beginning in Singapore.

Dmitry Rybolovlev earlier this year. Photo by Valery Hache/AFP/Getty Images.

Representatives for Rybolovlev’s family trust fired back almost immediately. In a statement shared with Midnight Publishing Group News, attorneys Marc Henzelin and Sandrine Giroud called the prosecutor’s decision “one-sided.”

“Public interest in this matter is all the more important given that some of its main protagonists are notorious for having failed to declare to the Geneva tax authorities the money they collected” from Rybolovlev, they said. The attorneys reiterated the allegation that Bouvier overcharged Rybolovlev by as much as $1 billion during 40 artwork transactions over a period of 10 years.

This includes the most expensive painting ever sold at auction, Leonardo da Vinci’s portrait of Christ, known as Salvator Mundi (circa 1500), which Bouvier sold to Rybolovlev for $127.5 million, just hours after acquiring it for $83 million from three dealers, in a deal brokered by Sotheby’s. 

Christie's employees pose in front of Leonardo da Vinci's Salvator Mundi ahead of its sale at Christie's New York on November 15, 2017. Photo: Tolga Akmena/AFP/Getty Images.

Christie’s employees pose in front of Leonardo da Vinci’s Salvator Mundi ahead of its sale at Christie’s New York on November 15, 2017. Photo: Tolga Akmena/AFP/Getty Images.

Rybolovlev then re-sold the work at Christie’s in 2017 for a world record price of $450.3 million. (Critics have pointed out that it’s difficult to see, therefore, how he can make the case for losing out when he received a presumbly hefty share of the more than $270 million in profit on the re-sale. There was a third-party backer at the sale who would have also shared in the upside.)

Bouvier appeared in the recently released movie Lost Leonardo about the mystery surrounding the painting’s current whereabouts. “It’s common sense. You buy low and sell high,” Bouvier said in the film about the transaction.

Rybolovlev announced immediately after the prosecutor’s decision that he would file an appeal in a Geneva criminal court.

The Geneva prosecutor, Bertossa, said that “most of the exhibits introduced” by Rybolovlev to support his complaints “were produced or gathered in the investigation in Monaco in an illicit and disloyal way” and were biased by violations of an “extreme gravity” on his part, according to the Art Newspaper. Bertossa’s office did not respond to requests for comment. 

Philippe Narmino, Minister of Justice of Monaco. Photo by Pascal Le Segretain/Getty Images.

Philippe Narmino, Minister of Justice of Monaco. Photo by Pascal Le Segretain/Getty Images.

The prosecutor was referring to a 2017 corruption scandal in Monaco, dubbed “Monaco-gate” by the French press, involving Philippe Narmino, the minister of justice for Monaco who resigned after Le Monde published text messages revealing that he worked on behalf of Rybolovlev to influence the case.

Narmino, 64, reportedly decided to take an “early retirement” just hours after Le Monde posted the texts, which suggested “a vast influence-peddling scandal at the heart of Monaco institutions,” according to the newspaper.

Bouvier addressed this in his statement, saying: “The tables have now turned: Rybolovlev (and his lawyer Tetiana Bersheda) find themselves under three criminal investigations in Monaco, Switzerland, and France, and is suspected of having instrumentalized and corrupted public officials in the process of his attacks against Bouvier. Ten people, including several former Ministers, are being investigated as part of what is known as ‘Monacogate,’ the largest corruption scandal in Monaco’s history.” 

Bouvier further asserted that Rybolovlev’s attacks on him were motivated by his divorce, for which he wanted to depreciate the value of his art collection. “Secondly, he wanted to punish me for having refused to corrupt Swiss judges for his very expensive divorce. Thirdly, he wanted to steal my freeport business in Singapore and build his own for the Russian Federation in Vladivostok,” according to the statement.

“Today marks the end of the scandalous vendetta initiated by Rybolovlev in 2015,” said David Bitton, a lawyer for Bouvier in Geneva, “and a complete and absolute victory for our client.”

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