In the course of 2015 a scandal of potential significance to dealers and their clients emerged. Allegations involving Yves Bouvier, the well-known art dealer and the largest private shareholder in the Geneva freeports (Ports Francs & Entreports de Geneve SA), came to light when Dmitry Rybolovlev, the Russian oligarch, brought civil and criminal proceedings against Bouvier in Monaco. Separate civil proceedings against Bouvier in Singapore (Accent Delight International Ltd v Bouvier) sought an order for the delivery up of a Mark Rothko painting (No. 6 Violet, Vert et Rouge). Rybolovlev alleged that Bouvier overcharged him by €60M for the Rothko painting. Bouvier had been an art consultant to Rybolovlev since 2003.
The High Court in Singapore has now determined ( SGHC 40 (Lai Siu Chiu SJ)) that Singapore rather than Monaco is the appropriate forum for determining Rybolovlev’s civil complaints. It seems possible the case may even transfer to the Singapore International Commercial Court. While the judgment is not determinative of the underlying issues which are still to be fully pleaded, the plaintiffs (Rybolovlev’s corporate vehicles) have made claims against Bouvier for loss and damage including breach of fiduciary duty, conspiracy to injure and to defraud, and liability to account as constructive trustee.
Unpicking the legal and commercial relationships between individuals who have engaged in informal and/or largely undocumented transactions is rarely an easy task, especially when the deals in dispute are multi-jurisdictional and cloaked in secrecy. It is unclear just how well the relationship between Rybolovlev and Bouvier was documented. Still, domestic courts are not unfamiliar with the intricacies of the art market or the nature of the relationships between art dealers and their clients.
Issues arising from the art dealer-agent paradigm were considered in the English High Court in Accidia Foundation v Simon C Dickinson Ltd ( EWHC 3058 (Ch), Vos J). There the Court found that Dickinson, an art dealer, had in fact acted as agent for Accidia as the ultimate but undisclosed client. This had significant consequences for Dickinson. Among other things the court prevented Dickinson from keeping commission taken without Accidia’s knowledge. The court held that, if the parties had intended to allow Dickinson to sell the piece in question at whatever price it could without telling Accidia the ultimate price, then Accidia had to give its informed consent to that arrangement. As Accidia had not given such informed consent, Dickinson was required to account to Accidia for the commission it took but had failed to disclose.
While the legal framework within which the Bouvier affair will be determined is yet to be revealed, Singapore has a common law system akin to England’s, and the courts in Singapore often refer to English case law where common issues are raised. It may be, therefore, that the courts in Singapore will bring to mind the Accidia case when hearing and deciding this dispute. Cases such as these reinforce the importance of dealers and clients being as clear as possible about the nature of their relationship and the basis for an agent’s remuneration in what largely remains an unregulated market.
Tony Baumgarter is a partner and Gillian Waugh is an associate at Clyde & Co.