Dmitry Rybolovlev is suing a famous auction house, stating that they were complicit in multiple fraudulent transactions that cost him more than $160 million in losses.
One particular court case has taken the art world by storm in recent weeks, and that’s the court trial between Russian oligarch Dmitry Rybolovlev and renowned auction house Sotheby’s. Rybolovlev is the 179th richest person in the world today with a net worth of $11.6 billion, according to the Bloomberg Billionaires Index. Though money isn’t much of an issue for someone as wealthy as Rybolovlev, the billionaire is seeking justice for what he reports were fraudulent transactions. The oligarch has accused Sotheby’s of overcharging him by over $160 million in multiple art sales with the help of Swiss art dealer, Yves Bouvier, as per Larry Neumeister of AP News.
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“So it’s not an issue of money. Well, not only of money. It’s important for the art market to be more transparent,” Rybolovlev shared in a statement, as per Neumeister of AP News. “Because […] when the largest company in this industry is involved in actions of this sort, you know, clients don’t stand a chance.”
But what exactly happened between the oligarch and his dealer Bouvier? Did Sotheby’s really have a hand in the fraudulent sales, or were they collateral damage in a conflict that lies outside their responsibilities as an auction house? There are no clear answers to these questions, and as with many of these kinds of art cases, there are different sides to the story that present a more complex picture of what happened.
Lack of Transparency and a Betrayal of Trust: Rybolovlev’s Side of the Story
For years, the Russian billionaire has worked to amass an enviable art collection made up of works from some of the greatest minds of all time. At the center of the Sotheby’s case are four particularly rare and valuable pieces. These include Leonardo da Vinci’s “Salvator Mundi,” Amedeo Modigliani’s sculpture “Tête,” Gustav Klimt’s “Wasserschlangen II,” and René Magritte’s “Le Domaine d’Arnheim,” as per Rupert Neate of The Guardian.
Those who’ve been following the art world for a while are likely familiar with “Salvator Mundi,” the masterpiece that holds the title of most expensive painting in the world after Rybolovlev sold it to Mohammed bin Salman for $450 million in 2017, according to Caryn James of the BBC. Before Rybolovlev sold the piece, he purchased it for over $127 million from Bouvier in 2013, who bought it from Sotheby’s for $83 million, reports Neumeister of AP News. This was, unfortunately, just one of the many dubious transactions that Bouvier conducted on behalf of Rybolovlev, resulting in very high markups.
Partners in Crime?
The billionaire already sued Bouvier years ago for the “Salvator Mundi” transaction, stating that the Swiss dealer overcharged him by around one billion total during the sales of 38 artworks, writes Rupert Neate of The Guardian. The lawsuit against Bouvier took place all across Monaco, Singapore, New York, Hong Kong, and Switzerland. However, the pair had settled the dispute last month, according to Madison Darbyshire of Financial Times.
That said, the oligarch continues to express the betrayal he feels over Bouvier’s actions, as he had placed complete trust over the dealer. Now, Sotheby’s finds itself in the center of a lawsuit with Rybolovlev, who says that the auction house aided in the fraudulent purchases of the four valuable works of art. The oligarch is seeking over $232.5 million in damages, accusing the auction house of providing valuations of the pieces to Bouvier, who would acquire them to sell them at higher prices, according to Chris Dolmetsch and Ava Benny-Morrison of Fortune.
Failure to Fact-Check: Sotheby’s Side of the Story
Sotheby’s and its staff, of course, have their own side of the story. Firstly, lawyers of the auction house stated that they weren’t aware that Bouvier was lying to Rybolovlev and selling the works at inflated prices, adds Fortune. This applies to the billionaire’s purchase of the “Salvator Mundi” painting, as Bouvier hadn’t disclosed it to the auction house.
What’s more, Sotheby’s lawyer Marcus Asner adds that Rybolovlev never had a written agreement with Bouvier or checked contracts with the sellers Bouvier was dealing with, according to Graham Bowley of The New York Times. Bouvier used this in his defense in the past, stating that he never acted as a dealer and simply purchased the paintings on his own before reselling them to the oligarch, as per Fortune.
No Due Diligence
To summarize, the auction house explains that Rybolovlev is responsible for his financial losses due to a significant lack of due diligence. It’s a defense that’s even more difficult to contest given the billionaire’s background as a high-flying businessman. According to Madison Darbyshire of Financial Times, the counsel for Sotheby’s pointed out Rybolovlev’s years of entrepreneurial experience. They add that he should be accustomed to doing more research when making big financial decisions.
Rybolovlev argued that the art world lacked transparency, and that even his experience as a businessman didn’t prepare him for the industry’s practices, reports Graham Bowley of The New York Times. The oligarch adds that even if he had asked Bouvier for documents, the dealer could’ve very easily provided false ones—which would’ve been difficult for Rybolovlev to discern.
Still, the fact remains that the Russian billionaire had fully entrusted incredibly large sums of money (a whopping total of around two billion, as per Bowley in his feature for The New York Times) to Bouvier, without putting anything into writing or seeking verification.
“Throughout Mr Rybolovlev’s testimony, it was patently clear that, as a self-made billionaire with a diverse and expansive network of interests, none of the care and attention to detail he attended to his businesses were given to his art transactions,” expressed Sotheby’s in a statement, as per Madison Darbyshire of Financial Times.
Banner photo by Francknataf via Wikimedia Commons.
