A New York federal jury ruled in favor of Sotheby's on Tuesday in a lawsuit brought against the auction house by Russian billionaire art collector Dmitry Rybolovlev. The jury's decision marked a setback for the fertilizer tycoon, who claimed that Sotheby's played a role in a scheme that cheated him out of more than $160 million during his art collection's assembly.
Rybolovlev, known for his significant holdings in art, had accused Sotheby's of collaborating with a Swiss art dealer to impose exorbitant markups on the artworks he purchased. The collector testified earlier this month, tearfully expressing not only the financial loss but also a loss of trust. However, Sotheby's maintained its innocence throughout the legal battle, asserting that it had adhered to all legal, financial, and industry standards. The auction house hailed the verdict as a validation of its commitment to integrity and professionalism in the art market.
Rybolovlev's lawyer, Daniel Kornstein, contended that the secretive nature of the art market made it challenging to prove a complex case of aiding and abetting fraud. He further emphasized that the lawsuit had succeeded in drawing attention to the lack of transparency that plagues the industry. Kornstein called for reforms, emphasizing that changes needed to be made outside the courtroom.
Over the course of 12 years, Rybolovlev expended a staggering $2 billion on his art collection, which featured renowned artists like Picasso, Rodin, Modigliani, Klimt, Magritte, and Leonardo da Vinci. To navigate the art world, he enlisted the assistance of Swiss broker Yves Bouvier. The collector had initially regarded Bouvier as a trusted confidant, even inviting him to intimate birthday celebrations. However, Rybolovlev eventually came to suspect that Bouvier was deceiving him. He alleged that the art dealer inflated the prices of the artworks he acquired and pocketed the excess for himself, on top of his agreed-upon 2% commission.
In December, Bouvier and Rybolovlev reached an undisclosed settlement, according to Bouvier's legal team. The art dealer's representatives reiterated this month that Bouvier strongly denied any allegations of fraud. During private transactions, Sotheby's sold artworks to Bouvier, who would then resell them to Rybolovlev. The billionaire's lawyers argued that the auction house either had knowledge or should have known about the deception and thus had a responsibility to inform Rybolovlev.
Rybolovlev emphasized that the issue at hand went beyond mere monetary concerns. He stressed the importance of a more transparent art market, highlighting that clients stand little chance when even the largest company in the industry is involved in dubious actions. His testimony underscored the need for heightened transparency and trust.
Sotheby's lawyer Sara Shudofsky countered Rybolovlev's claims, arguing that the billionaire was attempting to hold an innocent party accountable for the actions of another. Shudofsky contended that Rybolovlev did not exercise enough diligence in his dealings with Bouvier and failed to take adequate precautions against being deceived.
The trial focused on four artworks out of the alleged 38 fraudulent transactions involving Bouvier. Notably, one of the artworks was Leonardo da Vinci's masterpiece, 'Salvator Mundi,' a portrait of Jesus Christ that had been lost for centuries. According to Rybolovlev's legal team, Bouvier purchased the painting from Sotheby's for $83 million and then sold it to the billionaire for over $127 million a day later.
In 2017, Rybolovlev sold 'Salvator Mundi' through Christie's for a record-breaking $450 million, making it the most expensive painting ever sold at auction.
The jury's decision in favor of Sotheby's deals a blow to Rybolovlev's extensive efforts to seek restitution for alleged wrongdoing. The outcome of this case highlights the challenges of navigating the intricacies of the art market, underscoring the pressing need for increased transparency and ethical practices within the industry.
