Russian billionaire Dmitry Rybolovlev, owner of football club AS Monaco, is suing auction house Sotheby’s for allegedly helping an art dealer cheat him out of tens of millions of euros.
ADVERTISEMENTA Russian billionaire is suing Sotheby’s, claiming the auction house helped an art dealer trick him into paying tens of millions of euros more for art than it was worth.
Russian oligarch Dmitry Rybolovlev – who, according to Forbes, has a net worth of $6.4 billion (€5.8 billion) – filed a lawsuit with a New York court against the 280-year-old British auction house, the latest in a long-running legal battle that’s shaken up the art world.
In an opening statement in Manhattan federal court on Monday, Sotheby's attorney Sara Shudofsky told a jury that Rybolovlev was “trying to make an innocent party pay for what somebody else did to him.”
Shudofsky said the potash fertilizer magnate, a savvy businessman who has run highly successful businesses, had “good reason to be angry with himself” after spending hundreds of millions of dollars to buy art masterpieces without taking “the most basic steps” to protect himself from a broker who cheated him.
“Sotheby's didn't know anything about those lies,” the attorney said. “Sotheby’s had no knowledge of and didn’t participate in any misconduct.”
Rybolovlev’s lawyer, Daniel Kornstein, insisted that a London-based Sotheby’s executive was part of a group of executives involved in an elaborate fraud.
“As a result of participating in the fraud, Sotheby's made a lot of money,” Kornstein said. “Sotheby's had choices, but they chose greed.”
A world-class art collection
According to court documents, Rybolovlev spent approximately $2 billion (€1.8 billion) over 12 years to acquire a world-class art collection, which included masterpieces by Leonardo da Vinci, Gustave Klimt, Auguste Rodin and Amedeo Modigliani.
The lawsuit states that Rybolovlev’s team later discovered the Swiss art dealer who advised him in purchasing the works, Yves Bouvier, had “cheated them by buying the works himself for one price and charging them another price - millions or tens of millions of dollars higher.”
Bouvier claimed he could save Rybolovlev money by handling negotiations for art in return for a 2 percent commission, Kornstein told the court.
Rybolovlev has already sued Bouvier himself over the matter in Hong Kong, New York, Singapore and Switzerland, claiming he overpaid upwards of $1 billion (€913 million) on 38 pieces because of the scheme. The art dealer denied the accusations, and the pair quietly settled their dispute out of court late last year.
Bouvier is not a defendant in the Manhattan trial.
This new lawsuit alleges that Sotheby’s aided and abetted the Swiss art broker, by inflating the valuations for 16 of the works purchased by Rybolovlev, including Leonardo Da Vinci’s “Salvator Mundi,” which went on to become the most expensive artwork ever sold.
A US district court judge ruled last year that the auction house must face fraud-related claims on four of the works it helped sell to Rybolovlev – "Salvator Mundi", Modigliani's sculpture "Tête," Klimt's masterpiece "Wasserschlangen II" and René Magritte's 1962 "Le Domaine d'Arnheim".
Rybolovlev bought Da Vinci’s “Salvator Mundi” in 2013 for $127.5 million, a price that Bouvier told him was agreed after tough negotiations with an unnamed seller, according to court documents.
However, the lawsuit claims “these negotiations never happened,” and that the painting was actually worth around $90 million (€82 million) when Rybolovlev bought it. The lawsuit also claims that Sotheby’s inflated the valuation of the painting in official communications to justify Bouvier’s hefty markup.
Four years later, Rybolovlev sold “Salvator Mundi” for $450 million (€411 million) to Saudi crown prince Mohammed bin Salman, at a Christie's auction in New York. The painting's whereabouts are now a mystery, and its authenticity has been questioned by many art experts in recent years.
57-year-old Rybolovlev, who owns football club AS Monaco and the Greek island of Skorpios, is expected to testify before the court during the proceedings.
ADVERTISEMENTHis lawyer, Mr Daniel Kornstein, says that in total, Bouvier pocketed $164 million (€150 million) through his “secret markups” and another $6.4 million (€5.8 million) by collecting his 2% commission.
The lawyer told jurors to look at documents including emails that “don't lie” and would prove that auction house executives knew what was happening. He urged them to ignore what he predicted would be “fairy tales” from Sotheby's witnesses.
“The client is looking forward to the trial. 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. The trial can provide another important benefit: it can show the world how the art market sometimes operates; it can warn other collectors and art enthusiasts to protect themselves.”
