Dmitry Rybolovlev vs Sotheby’s: trial starts today
@ Wikipedia
The owner of AS Monaco is accusing the auction house of playing a part in the dispute between himself and Yves Bouvier.
A new chapter in the Bouvier-Rybolovlev affair is about to unfold this week. Dmitry Rybolovlev, the owner of AS Monaco, is suing Sotheby’s, the famous auction house. The trial begins on Monday 8 January in New York, as reported by several US media outlets.
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It all began in 2015: Dmitry Rybolovlev accused Yves Bouvier, a Swiss art dealer, of swindling him over the sale of several masterpieces. According to the Wall Street Journal, Sotheby’s was involved in some of these sales. A document drawn up by the AS Monaco owner’s lawyers alleges that Sotheby’s helped Yves Bouvier by inflating the estimated value of the works, to conceal the high margins, the art dealer was making. According to the Wall Street Journal, Sotheby’s completely denies the allegation.
Sotheby’s an accomplice to fraud?
The key issue in this trial will be to determine whether the auction house knew that Yves Bouvier was being dishonest with Dmitry Rybolovlev and then concealed the truth to benefit the art dealer.
The trial is of particular importance because one of the four works of art involved is Leonardo da Vinci’s famous Salvator Mundi, the most expensive painting ever sold at auction. The other three works are Tête, a sculpture by Modigliani, as well as a painting by Gustav Klimt, Wasserschlangen II, and another by René Magritte, Le Domaine d’Arnheim.
Dmitry Rybolovlev bought these works of art and dozens of others between 2002 and 2014 with the help of Yves Bouvier. Then in 2015, the AS Monaco owner accused the Swiss art dealer of defrauding him of nearly a billion Swiss francs over purchases of 38 works of art. 12 of these were allegedly acquired at private sales organised by Sotheby’s, and four are now at the centre of the dispute.
According to Dmitry Rybolovlev’s lawyers, Yves Bouvier took advantage of his position as art advisor by simulating non-existent negotiations with sellers on behalf of Dmitry Rybolovlev. AS Monaco’s owner alleges, he was in fact secretly acting as an art dealer, often inflating prices by tens of millions of dollars. While Yves Bouvier denies the accusations, Dmitry Rybolovlev is accusing Sotheby’s of complicity and claims that the auction house aided and abetted Yves Bouvier, as a very good client of Sotheby’s.
Four works at the centre of the trial
According to the New York Times, in the case of the Modigliani sculpture, which is one of the four works involved in the American case, the judge accepted the following evidence: a Sotheby’s representative, Samuel Valette, allegedly told Yves Bouvier, in a 2012 email, that the sculpture was worth at least €70-90 million. Less than 12 hours later, he reportedly revised this estimate to €80-100 million. Yves Bouvier is said to have passed on the higher estimate to Dmitry Rybolovlev’s staff.
As for the famous Salvator Mundi, which the Russian billionaire bought in 2013, Samuel Valette reportedly met Yves Bouvier and Dmitry Rybolovlev in New York, where the two men inspected the painting. Yves Bouvier then reportedly wrote to Dmitry Rybolovlev’s staff to inform them about the negotiations with the seller, claiming that offers of $90 million, $100 million, $120 million, and then $125 million had been rejected.
However, in May 2013, Yves Bouvier bought Salvator Mundi from Sotheby’s himself for $83 million, then sold it to Dmitry Rybolovlev for $127.5 million a day later, according to documents submitted to the court. The judge in the New York case then concluded that the supposed negotiations between Yves Bouvier and the seller had never taken place.
Sotheby’s is accused of helping Yves Bouvier to overcharge for several works of art and of concealing information that would have enabled Dmitry Rybolovlev to be aware that Yves Bouvier was the true owner of the works he was buying.
Dan Kornstein, the lawyer for Rybolovlev’s family trusts, told the New York Post : “For the first time, all the evidence will be presented. For the first time in nine years, Mr. Rybolovlev will speak publicly and provide a detailed account of the truth about this case,” and that this could serve to “warn other collectors and art enthusiasts to protect themselves.”
Marcus Asner, a lawyer for Sotheby’s, told the American newspaper that the trial will show the auction house “strictly adhered to all legal requirements, financial obligations and industry best practices during the transactions of these artworks.”
As the Wall Street Journal points out, the art world is likely to be watching this trial closely, as several leading figures in this highly secretive field could be called to testify, including the Sotheby’s Chief Executive Bill Ruprecht, and the current CEO at Bonhams, Bruno Vinciguerra, who previously worked as chief operating officer for Sotheby’s, as well as powerful art dealers and art advisers. “For a glamorous realm that prides itself on exclusivity and discretion, the chance to see any of these tastemakers take the stand in a courtroom may prove irresistible,” the business daily concludes.
The Bouvier-Rybolovlev dispute closed in Geneva
Although his name will no doubt be mentioned regularly during the hearing, Yves Bouvier is not on trial here. He and Dmitry Rybolovlev came to an extremely confidential agreement, leading to criminal proceedings by the Geneva Public Prosecutor’s Office being closed on 6 December, as reported in the Swiss newspaper Le Temps. Yves Bouvier does, however, owe 100,000 Swiss francs (around €107,500) in legal costs.
Be that as it may, the Sotheby’s trial should not only shed light on the role played by the auction house in this affair, but also make the case for greater transparency in the art market, which is notoriously opaque. As The Art Newspaper points out, we could see a sharp increase in litigation as disappointed investors seek redress through the courts.