Sotheby's battles US Government over Cambodian statue

Another update, this time to the Cambodian art dispute reported here.

By way of reminder, in August 2011, the US government intervened in a claim by the Cambodian government in respect of an ancient sandstone statue that was listed for auction by Sotheby's. Sotheby's then withdrew the statue from sale.

In a latest development, both sides to the dispute have filed motions with the US District Court in Manhattan accusing the other of unethical behaviour.

On it's side, Sotheby’s is accusing the US government of intervening in their negotiations to sell the statue in a private deal which would have allowed for the return of the statue to Cambodia. Their claim is that the government blocked the deal as it wanted all the credit for the statue's return.

Meanwhile, the prosecutors have accused one of their former colleagues,  Jane A. Levine, who now works for Sotheby's, of providing them with “false and misleading information” in relation to the statue.

Sotheby's, additionally, filed further evidence disputing the ability of the US government to bring the case, and asked the judge to defer the further exchange of discovery until the court has ruled on on its motion to dismiss the case.

The court has set the next hearing for 14 October.

Source: The New York Times, 13 September 2013

Cambodian art dispute

Last week saw the latest step in an art dispute between Cambodia and Sotheby's.

The dispute concerns a 10th century sandstone statue. Sotheby's listed the statue for auction on 24 March 2011.

The press release noted that the auction of Indian & Southeast Asian Works would "be led by a spectacular 10th century Khmer Koh Ker period Athlete from a European private collection (est. $2/3 million). Acquired by the original owner over 40 years ago, the figure is mate to the Koh Ker athlete at the Norton Simon Museum in Pasadena that is almost identical in posture and physical appearance." Indeed, it is reported that in 2007, archaeologists were able to match the statue to its pedestal at a temple site in Koh Ker, a temple complex 60 miles northeast of the more well-known Angkor Wat.

At the last minute, however, the statue was removed from the auction following a claim from the Cambodian government that it had been illegally removed from Cambodia during the reign of the Khmer Rouge and should be returned to the country. Subsequently, following a request from Cambodia, US federal prosecutors filed a forfeiture claim on Cambodia's behalf. Then, in June of this year, Sotheby’s filed an unsuccessful motion to dismiss the claim on the grounds that there was no evidence that the statue had been stolen from Cambodia.

Most recently, on 21 August 2012, evidence was filed that accused Sotheby’s of knowing that the sculpture had been stolen from Cambodia when it put the work up for auction in March 2011. In this respect, the New York Times reports that:

"In their new filing, the prosecutors included statements from two heritage law experts who said that, under Cambodian and British law, the statue should be treated as stolen property.

One expert, Matthew Rendall, said the statue is covered under Cambodian statutes, royal orders and decrees dating to the early 1900s that declare such items to be the “exclusive” and “immovable” property of the government. Mr. Rendall noted five occasions between 1985 and 1997 when Sotheby’s returned sculptures to Cambodia after claims they had been looted sometime after 1970.

Sotheby’s says the sculpture could have been spirited away any time during its thousand-year history and was bought in good faith by the husband of its current owner in 1975 from a London dealer.

Experts cited by the United States and Cambodian governments insist the statue was removed more recently. The say it was too remotely located and too heavy – more than 600 pounds — to have been carried off until adequate roads were built into the region sometime after 1960."

Disputes over ownership of looted artworks are not new. However, the decisions do go either way. It remains to be seen whether the statue will be returned to Cambodia. If it can be shown that Sotheby's knew that the statue was stolen, there is a good chance that the US attorney's claim will be successful. But, it is unlikely to be very easy to prove Sotheby's knowledge. Perhaps a better standard, in any case, is whether Sotheby's ought to have known. As one of the world's largest art auctioneers, it is difficult to believe that Sotheby's did not question the origin of the statue when it was offered to them for sale.

Source: The New York Times, 21 August 2012

No innocent owner defence for stolen art as US court orders return of painting to France

In a recent decision of the United States Court of Appeals Second Circuit, another innocent buyer of a stolen painting has had to forfeit the work to the original owner from whom the work was stolen.

The painting in question is “Le Marché,” by Camille Pissarro, which was one of two paintings stolen from the Musée Faure in Aix–les–Bains, France on November 16, 1981.
By way of background, in 1985, the claimant/appellant, Sharyl R. Davis purchased the painting at fair market value from J. Adelman Antiques and Art Gallery, to whom the thief had consigned the work, unaware that it had been stolen, and it was only twenty years later, when Davis consigned the work to Sotheby's for sale at auction that the painting's provenance came to light. At this point, the French police became aware of the impending sale and informed US law enforcement officials that the painting had been stolen twenty-two years earlier. The US Department of Homeland Security thus requested that Sotheby's withdraw the painting from auction, and following the compilation of evidence to substantiate the theft, the US government filed a complaint in the Southern District of New York in November 2006 seeking forfeiture of the painting in order to return the work to France.

On 19 January 2010, the district court gave its judgment in favour of the US government and ordered forfeiture. Davis appealed and the 2nd US Circuit Court of Appeals was required to hear the matter. Davis argued that the government had failed to demonstrate probable cause under the applicable US law, namely, 19 U.S.C. § 1595a and the National Stolen Property Act.

Under section 1595a, merchandise “introduced into the United States contrary to law,” may be subject to forfeiture if that property “is stolen, smuggled, or clandestinely imported or introduced.” To satisfy the “contrary to law” requirement, the government alleged that the thief had violated the NSPA by stealing Le Marché from the Musée Faure back in 1981, transporting it into the United States, and then consigning it to Adelman. Davis submitted that the district court committed three errors in its application of the NSPA. Firstly, Davis argued, “contrary to law” referred only to violations of the customs laws, not to violations of the NSPA. Second, Davis said that the district court erred in granting summary judgment to the government on whether Le Marché's value met the NSPA's statutory minimum of $5,000. Finally, Davis argued, Le Marché was no longer “stolen” property within the meaning of Section 1595a(c), and was therefore not subject to forfeiture.

Unfortunately for Davis, the Court rejected each argument. In particular, in relation to Davis claim that she should have been allowed to assert an innocent owner defence, the court noted: 

• The statute states that property introduced into the U.S. contrary to law "shall" be forfeited.
• Use of the word 'shall' “indicated that Congress intended forfeiture under §1595a(c)(2) to happen as a matter of course.
• Such definite language was not susceptible to an interpretation that a legitimate possessory interest in the property might defeat an otherwise valid forfeiture claim.
• It was unsurprising that the law — enacted more than eighty years ago — would require forfeiture of property regardless of the owner's culpability.
• Early statutes used to enforce the customs laws․ generally, contained no innocent owner defence. Historically, the owner of forfeited property could be entirely innocent of any crime, and, indeed, the Supreme Court had held, in a case addressing another provision of the Tariff Act of 1930, that “forfeiture may be enforced even against innocent owners․ The penalty is at times a hard one, but it is imposed by the statute in terms too clear to be misread.”

This judgment is an important reminder of requirement for sound due diligence in the purchase of art. Not only did Davis have to pay the costs of a drawn out court action, but she also lost the benefit of her long term investment.

Read the full decision here.