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Thursday, February 15, 2024

Russian tycoon loses $230 million art trial in US

Dmitry Rybolovlev had sued the auction house Sotheby’s for allegedly helping a dealer defraud him

A New York jury has ruled against Russian billionaire Dmitry Rybolovlev in a high-profile court case the businessman brought against art auction house Sotheby’s, which he accused of aiding and abetting fraud.

Rybolovlev claimed that Sotheby’s was involved in a scheme allegedly orchestrated by Swiss art dealer and adviser Yves Bouvier, whom the businessman accused of flipping art purchases to him at a high markup and pocketing the difference, despite his belief that Bouvier was acting as his agent and adviser. Rybolovlev claims that he overpaid by about $1 billion for various purchases of art.

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The Russian billionaire’s battle with Bouvier started back in 2015, when he first accused the dealer of unlawfully overcharging him. Rybolovlev filed numerous lawsuits against Bouvier in various jurisdictions. In October 2018, two companies controlled by Rybolovlev went on to sue Sotheby’s, alleging that the auction house had “materially assisted” Bouvier in defrauding the businessmen.

The lawsuit had originally included 16 acquisitions of artwork from April 2011 to January 2015. Sotheby’s won dismissal of most of the claims in March of last year on grounds that the complaints were either filed too late or lacked proof.

The most recent trial focused on four transactions Rybolovlev carried out with Bouvier – a 2011 $43.5 million purchase of Rene Magritte’s ‘The Domain of Arnheim’; a 2012 $183.8 million acquisition of Gustav Klimt’s ‘Wasserschlangen II’; a 2013 $67.6 million purchase of ‘Tete’, a goddess head sculpture by Amedeo Modigliani; and a $127.5 million purchase of Leonardo da Vinci’s long-lost ‘Salvator Mundi’.

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Rybolovlev was seeking more than $232.5 million in damages from the auction house for these deals, according to Bloomberg. However, a New York jury on Tuesday cleared Sotheby’s of allegations on all the claims. Following the ruling, Rybolovlev’s lawyer Daniel Kornstein said that money was not the first priority in the lawsuit.

“This case achieved our goal of shining a light on the lack of transparency that plagues the art market. That secrecy made it difficult to prove a complex aiding and abetting fraud case. This verdict only highlights the need for reforms, which must be made outside the courtroom,” Kornstein said in a statement.

Rybolovlev, who testified during the trial, had only a brief comment to the ruling, saying simply: “It’s life.” Sotheby’s, however, welcomed the jury’s decision, saying that it “vindicated” the auction house of any alleged misconduct.

According to earlier media reports, Rybolovlev and Bouvier opted for an out-of-court settlement of their separate legal battle last year, but the details of the deal have not been made public.

Rybolovlev previously owned Russian fertilizer giant Uralkali but divested of most of his major Russian assets back in 2017 and currently resides primarily in Monaco.