MANHATTAN (CN) — A civil trial against the famed British auction house Sotheby’s kicked off Monday afternoon with opening arguments from a Russian fertilizer tycoon who claims his former art dealer coordinated with Sotheby’s to surreptitiously overcharge his art purchases by millions of dollars.
Dmitry Rybolovlev, an owner of the French soccer club AS Monaco, has claimed that Swiss art dealer Yves Bouvier negotiated dozens of private deals that overcharged for him for a collection of pieces that he acquired for $2 billion between 2003 and 2015.
A dozen of these masterpieces were sold through Sotheby’s, and Rybolovlev claimed in a 2018 lawsuit that the fine art broker was uniquely positioned to facilitate “the largest art fraud in history” by manipulating the estimated value of the works and concealing the high margins and inflated commissions the art dealer was netting with each sale.
Rybolovlev’s lawyer, Daniel Kornstein, a partner at Emery Celli Brinckerhoff Abady Ward & Maazel, told jurors during opening arguments that Sotheby's knew of and assisted with the fraud.
“But money is not the only issue in this case,” Kornstein told jurors. “As matter of public importance, large institutions should not operate in the shadows.”
“Sunlight is the best disinfectant,” he said later. “Truth telling in the marketplace — any marketplace, not just art — is in the public interest.”
In a statement ahead of the trial, Kornstein said Rybolovlev looks forward to testifying and giving his detailed public account.
Five years after the civil case was filed in the Southern District of New York, U.S. District Judge Jesse Furman dismissed the bulk of Rybolovlev’s claims against Sotheby’s in a March 2023 ruling that held the auction house still must face fraud-related claims in connection with four artworks, including Leonardo da Vinci’s 500-year old painting of Christ, "Salvator Mundi,” which Rybolovlev eventually sold at Christie's in 2017 for a record-setting $450 million.
Bouvier and Rybolovlev's relationship soured in 2014 when The New York Times published a story about the sale of "Salvator Mundi," a painting of Christ whose title translates in English to “Savior of the World.”
Though the story reported that this painting sold for anywhere from $75 million to $80 million, Rybolovlev claimed he paid $127.5 million for the painting, roughly a 50% markup, with Bouvier taking $1,275,000 as his 1% commission, which his lawyers say included his $445,000 commission on the fraudulent $44 million secret markup.
The judge also advanced Rybolovlev’s aiding-and-abetting fraud claims against Sotheby’s based on the sale of Rene Magritte’s “Le Domaine d’Arnheim,” the sale of Gustav Klimt’s “Wasserschlangen II,” and the sale and auction of Amedeo Modigliani’s “Tête."
According to Rybolovlev, Bouvier purchased the Klimt painting for $126 million and then he charged Rybolovlev $184 million. The Modigliani sculpture was sold to Rybolovlev for $81 million, double the $40 million that had Bouvier paid.
All in all, Rybolovlev claims, Bouvier’s markups caused him to overpay by $1 billion on 38 total paintings over 11 years.
Kornstein also pointed the finger of culpability at Samuel Valette, Sotheby’s vice chairman for private sales worldwide, who he described as a “greedy and overly ambitious middle manager at Sotheby’s” who used the company’s reputation to help Bouvier to cheat Rybolovlev out of millions.
Bouvier, who is linked to infamous high-profile forgers and also faces accusations of stealing famous paintings, was arrested in early 2015 in Monaco.
Sotheby’s has denied any wrongdoing, and asserts that the auction house followed its standard operating procedure and best practices.
The auction house, represented at trial by law firm Arnold & Porter Kaye Scholer, emphasized in opening summation Monday afternoon that it had nothing to with Bouvier's purported fraud.
“Plaintiff’s quarrel is with Yves Bouvier,” Sara Shudofsky, attorney for the defense, told jurors repeatedly. “Sotheby’s didn’t know that Bouvier was making up negotiations with the sellers that never happened, Sotheby’s didn’t know that Bouvier was lying to the plaintiff or anybody else.”
“It didn’t know about any fraud or any other alleged misconduct,” she added. “What Bouvier did with the paintings was up to him.”
Shudofsky said there wasn't any evidence that Sotheby’s assisted in or benefitted from Bouvier’s markups when he resold pieces of art to Rybolovlev.
“It didn’t make a dime from any of them,” she said.
Shudofsky told jurors that keeping private sellers’ identities confidential is standard operating procedure for Sotheby’s.
Furman, the Obama-appointed judge presiding over the case, urged the two parties last year to settle the remaining claims outside of court, noting in the opinion that a trial “would be expensive, risky and potentially embarrassing to both sides.”
No such settlement came to fruition by Monday morning as dozens of prospective jurors filled the seats of Furman’s 11th floor courtroom in Lower Manhattan to select a panel for the civil trial.
In 2016, Sotheby’s filed suit in an effort to recoup monies from the da Vinci art sale and also to absolve itself of any blame in the dispute. The auction house, which made $3 million on the sale, argued it was owed more since the artwork ultimately was sold for $127 million instead of the $80 million listed reported to the auction house.
"Salvator Mundi” spent half a century in obscurity before it resurfaced in Louisiana in 2005, where it was sold to a pair of art dealers for less than $10,000 in an estate sale in New Orleans after its owner died.
The painting was later purchased in 2017 by an unnamed bidder, who was later identified as a Saudi royal who purportedly purchased it on behalf of the Louvre Abu Dhabi. It was supposed to have been unveiled a year later at the museum, but the exhibition was delayed indefinitely and the work hasn't been seen in public since.
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