Singapore sends Rybolovlev versus Bouvier case back to Switzerland

Apr 24th, 2017 | By | Category: Journal
Dimitry Rybolovlev will now face off against Yves Bouvier in Switzerland as Singapore has declined to try the case.

Dmitry Rybolovlev (left) will now face off against Yves Bouvier in Switzerland as Singapore has declined to try the case.

A Singapore Court, which was about to start deliberating over the long-running Rybolovlev versus Bouvier saga, has directed the case back to Switzerland, in a move that is seen to be more helpful to Bouvier who has previously sought to have the case tried in Switzerland.

The background to the case has been widely reported over the last couple of years but in brief hinges over whether Bouvier was acting as agent, or principal, while putting together a US$2bn art collection for Rybolovlev. Bouvier says he was the owner of the artworks, and thus could charge whatever he wanted, whilst Rybolovlev maintains he was an agent acting on a 2% commission, and shouldn’t have been taking sizable additional commissions.

Art dealers are following the case carefully because, if a judgment is eventually forthcoming, it will have ramifications on how to set up transactions. Often dealers have a choice as to whether they close a deal as an agent or a principal and a judgment may clarify what has long been a grey area. In addition, the auction rooms, which have principally been agents for the last couple of centuries, have been increasing their private transactions where they are now sometimes principal.

In its decision the Singaporean Court said that both parties signed four contracts between 2003 and 2006 which were exclusively governed by Swiss law and that they could not see that anything changed when the parties then relied on oral agreements for the 30 subsequent transactions. They added that both parties were Swiss residents until 2009 and that all the transactions were handled by Swiss banks. The Court of Appeal also closed the door to a transfer of the case to Singapore’s own International Commercial Court. The Court said it had “no hesitation” in rejecting the argument that Rybolovlev would be deprived of justice if he filed his suit in Geneva.

The sooner this case is resolved the better for anyone involved in the art world which is reeling from a slew of economists maintaining it is a vehicle for money laundering and capital flight. Banks are referring any major art transaction to their compliance units and having to try and explain art transactions to such people has become a new form of torture for art dealers.

Rybolovlev previously managed to freeze Bouvier assets in a Mareva injunction but Singapore, where Bouvier is resident, lifted that order in an earlier decision. Bouvier has said, “They (Rybolovlev) deceived justice and destroyed my reputation. I will destroy the only thing that affects this Russian billionaire refugee in Monaco: his fortune (however, according to Rybolovlev, Bouvier has already illegally relieved him of a billion dollars of his fortune). By engaging in this battle he has already burned his collection. Were he to sell it now he would not get half its value.”

Indeed, Rybolovlev has sold some his artworks for a considerable loss at recent auctions. Whether such loses are because he burned his artworks with this court case, or because Bouvier charged him enormous prices that were unrealizable again in such a short time span, I will let the reader decide.

Some of the spectacular losses included Gauguin’s “Te Fare (La Maison)” bought for US$85m from Bouvier which sold for US$25m, a loss of 74%, and Picasso’s 1970 “Jouer de flute et femme nue” acquired for US$35m which sold for US$5.8m, and Magritte’s 1938 “Le domaine d’Arnheim” which sank from US$43.5 to US$12.7m.

I can see both sides of this sorry tale and it does indeed rest on whether Bouvier was operating on a commission, and owed Rybolovlev a duty of care, or was acting as a dealer and trying to make as much as possible on each transaction. If it finally comes to trial in Switzerland then I imagine we are going to find out. In the meantime the case continues to cause problems for everyone involved in the art world. I suspect this unfortunate business will continue to throw up more twist and turns before it is resolved. Eventually, of course, we can expect the book and then the movie. Rybolovlev would be easy to cast but who would be perfect for Bouvier?  Or Tatiana Bersheda, Rybolovlev’s multi-lingual, glamorous and steely eyed Geneva based lawyer?

Tatiana Bersheda in diamonds on the red carpet at Cannes.

Tatiana Bersheda in diamonds on the red carpet at Cannes.




Tags: art dealers acting as agents or principals, art world litigation, Mareva Injunctions, Rybolovlev loses money while selling paintings, Singapore sends Rybolovlev versus Bouvier back to Switzerland, Tatiana Bersheda

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