Miró sale cancelled

In a similar situation to that Detroit (reported here and here), but on a larger scale, the Portuguese government sought to sell 85 works by Spanish surrealist Joan Miró in a bid to cut its debt.

Portugal hired Christie's (who was called in by the Detroit Institute of Arts to value its works) to sell the pieces.

The decision to sell the art drew widespread criticism, and a case was filed in Lisbon to prevent the sale. Although, the court ruled against the claimants, this week Christie's withdrew the artworks from its auctions.


Reuters explains:

The auctioneers withdrew [the artworks] from a London sale even though a Lisbon court threw out a suit by opposition lawmakers, prosecutors and the public trying to block the offer saying the government had violated the rules on classifying the artwork. 

The Miro collection, estimated at more than 35 million euros ($47 million), came into state hands in 2008 when Portugal nationalized the failed bank BPN that owned them. 

... 

"The legal uncertainties created by this ongoing dispute mean that we are not able to safely offer the works for sale," Christie's said only hours before the two-day sale was to start.  

The paintings are being offered by the state holding company Parvalorem, which is in charge of minimizing the impact of BPN's old debts and bad loans on public accounts.  

The court ruled the sale could not be stopped but noted that the state culture secretary's decision had not sought proper authorization to send the paintings to London last week.

The pieces remain at Christie's in London for now. We will have to wait and see whether they are returned to Portugal.

Source: Reuters, 4 February 2014

Sotheby's denies forgery claims

Following allegations that a piece of Chinese calligraphy sold at auction in New York in September 2013 is a fake, Sotheby's have been compelled to issue a statement insisting that the artwork in question is genuine.

By way of background, the Wall Street Journal explained last month:

An ancient Chinese scroll, which went under the hammer for $8.2 million at an art auction in New York, has become the focus of an intense debate between the auction house that sold it, the wealthy collector who bought it, and a trio of museum experts who have denounced it as a fake.  

 

The public spat began Saturday when three art experts from the Shanghai Museum alleged that the calligraphy work, titled “Gong Fu Tie,” [pictured above] was a forgery. Purchased at a Sotheby’s auction in September by collector Liu Yiqian, the piece is attributed to the Song Dynasty poet Su Shi, who lived from 1037 to 1101 and is known by the literary name Su Dongpo.  

The three specialists scrutinized the work in the Xinmin Evening News, a state-owned newspaper based in Shanghai. They added that they plan to release a research paper giving more details about why they believe the piece to be a counterfeit. 

Last week, the three experts published their findings in the China Cultural Relics News. They maintain that the calligraphy is a forgery produced using a special technique from the late Qing Dynasty. In response, Sotheby's insisted that the piece is genuine, and have said that their experts will also provide a more detailed response within 10 days.

This very public debate over the authenticity of an artwork sold at auction to a private collector is quite unusual. It seems particularly rare for a major museum to stand up to such a big auction house. However, it remains to be seen whether the intervention will have any effect on a sale that has already taken place.


Source: Wall Street Journal, 23 December 2013, Want China Times, 4 January 2014

Dia challenge, a summary

Readers of this blog may have heard mutterings about the recent controversy surrounding the auction by Sotheby's of a number of artworks owned by the Dia Art Foundation. In brief, this is what happened.

Earlier this month, two of the founders of the Dia Art Foundation filed suit in the Manhattan state court to prevent the organisation from selling a number of artworks from its collection.

The Foundation, a nonprofit organisation, which was established in 1974 to initiate, support, present and preserve art projects, had decided to sell some of its works at Sotheby’s to raise money. Founders Heiner Friedrich and Fariha de Menil Friedrich, sought an injunction against the Foundation and Sotheby’s to prevent the sale of the artworks. At the time, it was reported:

Many of the works named in the lawsuit were donated by Mr. and Ms. Friedrich when they created the foundation with the art historian Helen Winkler. The lawsuit claims that selling the works to private collectors would remove them “from public access and viewing in direct contravention of Dia’s entire intent and purpose.” The auction would be a breach of an “implied covenant of good faith and fair dealing” with the Friedrichs and the artists who made the works, the suit states.

The case was, however, dropped. The New York Times reported:

The founders, Heiner Friedrich and Fariha de Menil Friedrich, said in a written statement through their lawyers on Tuesday morning that while they consider the sale “utterly wrong” and “against Dia’s mission,” the foundation is “our precious child, and we do not wish to continue to oppose it through legal action.”

Accordingly, the sale of the works went ahead. It appears, from Sotheby's catalogue that the foundation raised a significant amount of money. Indeed Cy Twombly's Poems to the Sea (below) raised almost $22 million alone. Let's hope the foundation puts the money to good use.

Source:   The New York Times, 7 November 2013 & 12 November 2013

Qing chains chopped

It looks like the seller of the 18th century antique Chinese vase that broke all the records when it was "sold" at auction in 2010 will finally see a return.

Many will recall that back in 2010 this vase, created in China during the reign of Emperor Qianlong (1736-95), was sold at auction for £43m. The buyer, reportedly one of the richest men in China, was to pay this sum, plus the auctioneer's, Bainbridges, commission of £8.6 million. The Sellers, who had found the vase in their attic, were set for an incredible pay day.

Unfortunately, the deal stalled when seller refused to pay the Bainbridges' commission. It seems that it was part of the conditions of sale imposed by Bainbridges that a flat commission of 20% of the purchase price be paid, rather than using a sliding scale, often used by the larger auction houses.

The Sellers were unable to do anything, due to the terms imposed on them by Bainbridges – preventing them from selling the vase through another auctioneer.

And Bainbridges could not move from their 20% without the risk of legal action from the underbidder.

There was then a lot of speculation as to what was actually happening, which Bainbridges could not address having signed confidentiality agreements with both the seller and the buyer.

Those darn lawyers and their contracts!

There then followed almost two years of negotiations between Bainbridges and the buyer – to no effect.

The good news is that Bonhams swooped in to save the day. They were approached by an interested party and were able to successfully broker a deal with Bainbridges and the seller. The result: an unidentified buyer from the Far East is believed to have paid around £25 million for the vase. The majority of this money is said to be going to the seller, but Bainbridges will also be compensated. In any case, I'd say there was plenty of pie for everyone. Hopefully, it is all written down in a helpful contract!

Source: The Telegraph, 16 January 2013

Hong Kong's art market boom as China slows?

At the beginning of October, leading Chinese auctioneer China Guardian held its debut auction in Hong Kong, having been lured by Hong Kong's international buyers, low tax regime and stable regulatory framework.

Landscape series by Qi Bashi, Album of Mountains and Rivers
1922, which led China Guardian's auction

Reuters reports on the apparent shift in the Chinese art market as follows:

China Guardian's sale of Chinese art and classical furniture in the former British colony follows its rise as the world's third largest auction house on the crest of China's art market boom, with sales of $1.77 billion last year...

The sale, though relatively small, is seen as a symbolic foray by China's top auction company into the turf of goliaths Christie's and Sotheby's who have long dominated international auction hubs like Hong Kong, New York and London.

China Guardian's key rival, Poly International is also planning an inaugural Hong Kong sale in late November, while A&F Auction and Beijing Rongbao Auction aim to enter Hong Kong in one or two years, according to art market reports.

China's wave of millionaire buyers and investors have helped propel Hong Kong into the world's fourth largest art auction hub, with nearly 7 percent of global art auction revenue in 2011, according to French art database Artprice.com...

Art dealers and experts say the Chinese expansion into Hong Kong is also being driven by a tightening regulatory environment in China, that has grappled with widespread art crimes including tax evasion, a proliferation of fakes, money laundering and manipulative bidding practices...

In April, a large-scale Chinese customs probe into tax evasion on art imports delivered a blow to the art market, with at least six prominent art dealers, collectors and artists being investigated, according to art dealers and Chinese media reports. "The tax probe had a huge impact on the spring auctions in China," said the owner of an art gallery in Taipei who is a frequent buyer in the Chinese art market, but who declined to be identified because of the sensitivity of the matter. "Everyone finds himself in danger so the market is extremely cold." According to market researcher ArtTactic, total auction sales this spring from the biggest four auction houses in the China market dropped to $1.5 billion, 32 percent lower than the autumn season in 2011 and 43 percent less than a year before...

Art market experts, however, say Hong Kong's laissez-faire economy, solid regulatory framework and zero-tariffs on art imports, make it a secure and stable alternative for China's auction firms. Although Beijing has lowered its import duties on arts to 6 percent from 12 percent since the beginning of 2012, another 17 percent of value-added tax still poses a huge burden to Chinese auction houses.

It certainly seems that the Hong Kong market can only continue to grow, especially in light of its favourable tax regime as compared to China, as well as, obviously, its proximity.

Source: Reuters, 7 October 2012

Christie's conditions of sale found to be reasonable

The recent case of Avrora Fine Arts Investment Ltd v Christie, Manson & Woods Ltd (2012) saw Christie's' terms and conditions of sale put under scrutiny by the English High Court.

The case concerned a painting called “Odalisque” which the claimant, Avrora Fine Arts Investment Limited (“Avrora”), bought at an auction held by Christie's. The painting was said to be by a famous Russian artist Boris Mikhailovich Kustodiev. However, after the sale, an art dealer who had been asked to view Avrora's collection expressed doubts about the authenticity of the painting, and certificates were later obtained from Russian museums stating that the painting was not by Kustodiev.

The sale was conducted pursuant to Christie's' conditions of sale. These included a limited warranty enabling a buyer to cancel a sale and obtain a refund in the event that the item sold was found not to be authentic. They also provided that all statements made were statements of opinion; that, subject to the limited warranty, Christie's would not be responsible for errors and omissions in the catalogue; that each item would be sold "as is"; and that, subject to the limited warranty, no representation, warranty or guarantee would be given in respect of matters such as attribution, authenticity and provenance.

Avrora brought the claim to cancel its purchase of the painting and get a refund pursuant to the warranty given by Christie's. It also made claims against Christie’s for negligence and misrepresentation under the Misrepresentation Act 1967.

In respect of the first claim, the Court held that since the evidence indicated quite strongly that Kustodiev was not the painter, Avrora was entitled to cancel its purchase of the painting and to recover the money paid.

The Court then turned to Avrora’s claims under the Misrepresentation Act – that Christie's (i) had been negligent in attributing Odalisque unequivocally to Kustodievd; and (ii) had impliedly represented that it had reasonable grounds for attributing “Odalisque” unequivocally to Kustodiev when it did not in fact have such grounds. Both claims raise issues relating to the “requirement of reasonableness” in the Unfair Contract Terms Act 1977 (“UCTA”).

On the first point, the Court said that Christie's' conditions of sale made it clear that it was not assuming responsibility to Avrora. Therefore, the negligence claim must fail unless the conditions were found to be contrary to UCTA. However, on the second claim, the court found that a misrepresentation had been made as it was clear that Christie's had not only warranted that Odalisque was by Kustodiev but had represented that this was its opinion. Since Christie's was giving its opinion as well as a warranty, it had impliedly represented that it had reasonable grounds for holding that opinion.

The Court then considered UCTA. Avrora had submitted, that UCTA applied and Christie's' conditions failed the requirement of reasonableness as required under the Act since they would, if effective, preclude a negligence claim against Christie's. Christie's said that UCTA did not apply. The Court found that UCTA did apply as: "the conditions did “[part] company with reality” insofar as they negated the assumption of responsibility. The reality was that Christie’s had taken responsibility for the attribution of “Odalisque” to Kustodiev. It stated that that was its opinion; it gave Avrora a warranty to that effect; it indicated that its views reflected research (for example, by presenting itself as a centre of excellence and, more specifically, by explaining in the “Important Notes and Explanation of Cataloguing Practice” that more qualified catalogue entries – e.g. “Attributed to …” - were “based upon careful study” and represented “the opinion of experts”, tending to suggest that an unequivocal attribution would be too); and it was intending to charge the buyer a substantial premium."

The next question was, therefore, the “requirement of reasonableness” under UCTA was met. If Christie's' conditions failed to meet this requirement, the conditions could not bar a claim for negligence under the Misrepresentation Act. The Court found that the requirement of reasonableness was met. The court listed a number of reasons for this conclusion, including:

- there was no question of Avrora being left without a remedy if “Odalisque” proved not to be by Kustodiev, since Christie’s was giving a warranty;
- it was not unreasonable for Christie’s to exclude its liability in the event that the authenticity of the painting was incorrect;
- while Christie’s only contracted on its own standard terms, Avrora is a vehicle for a particularly rich man and it was under no economic imperative to deal with Christie’s if it did not wish to; and
- Avrora appeared to have some familiarity with Christie’s’ terms, and in any event could reasonably be expected to know of them.

Accordingly, the relevant parts of the conditions were not invalidated by UCTA and so could serve to bar the claims for negligence and misrepresentation.

To summarise, therefore, Christie's can continue to conduct business under its standard conditions of sale, under which it can contract out of liability in relation to the lots it sells. However, if it is established that a painting bought at a Christie's auction, under those conditions, is a forgery, the purchaser should be entitled to cancel the purchase and claim a refund of the money paid.

Queried title to sketches halts sale of Macca's mouse and friends

A creature of its time: this mouse, part of
the collection, with pipe, heavy eyelids and
working-class credentials, may have been
modelled on the late UK prime Minister
Harold Wilson, who was active at that time

A set of drawings, created by Sir Paul McCartney back in the 1970s, has been withdrawn from sale at an auction in Gloucestershire, England, after a legal challenge over ownership. Prototypes for a part-animated film, they were put up for sale by Maggie Thornton, daughter of animator Eric Wylam who died in 1997.  Although they have been in the family's possession for some 40 years, they were withdrawn from the auction after lawyers for the elderly Beatle -- one of only two survivors of the original Fab Four -- said they were unaware that their client had given them to Mr Wylam in the first place.  According to the BBC,

"... Chris Albury from Dominic Winter auctioneers in South Cerney, said he had no choice but to withdraw the items from sale. "The lawyers say they're still Paul McCartney's property as the film was made by his company MPL Communications," he said. "As such any work done by Paul or the team working on the film should have been returned to MPL or Paul at the end of its usage. "But this is contrary to what Maggie believes and what her father always told her."
...
The pictures, which were designs for the unreleased film The Bruce McMouse Show, had been expected to fetch £25,000 ..."".

Source: "Paul McCartney drawings withdrawn from sale at auction", BBC, 16 June 2011.  Further information concerning the drawings is available on The Mail here.

World's First Online Art Fair

The inaugural VIP Art Fair, which describes itself as "the first art fair to mobilize the collective force of the world’s leading contemporary art galleries with the unlimited reach of the Internet" is being held this week only from 22-30 January 2011.


Taking place at vipartfair.com, the VIP Art Fair aims to give contemporary art collectors access to artworks by critically acclaimed artists and the ability to connect one-on-one with internationally renowned dealers—from anywhere in the world and without leaving home.

Most of the details, including how to register to browse the art (which is free) can be found here. Glaringly omitted, at least at the registration stage, are the terms and conditions of sale. Indeed, according to this report, Noah Horowitz, the director of the VIP Art Fair has said that: "Exactly how transactions are conducted at the point of sale are entirely in the hands of buyer and seller; VIP simply helps to connect one party to the other....This means that purchases could happen without either side meeting each other in person or without the buyer seeing the actual work in the flesh prior to purchase." In other words, VIP is not offering an art auction type service, a la eBay or Christie's Live - but merely a forum, much like the London Art Fair, except that it is a virtual venue.

From a legal standpoint, it can be very risky to not have the legal terms set out from the beginning - particularly when trading valuable art. So, while this is a potentially exciting development, both purchasers and vendors of art via this service should be cautious and ensure they are protected. There will be no third party in the background ensuring the transparency of the transactions.

Source: DNAInfo.com, 21 January 2011