High Value Litigation Case involving Sotheby’s Auction House

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Back in 2011, Fairlight Art Ventures and Mark Weiss teamed up to buy what they believed to be the authentic painting ‘Portrait of a Gentleman’ by Dutch artist Fran Hals. The painting was sold at a Sotheby’s auction house in a private sale to American collector Richard Hedreen for $11.75 million. Upon investigation into paintings sold by Giuliano Ruffini, an alleged forgery ring was exposed, linking to sales of as much as $255 million. Sotheby started tests on the painting which “showed the presence of modern material used in the painting in a way that meant it could not have been painted in the 17th century.” Giuliano Ruffini, currently residing in Italy, has been issued an arrest warrant by the French Judge in charge of the investigation.

In response, Sotheby reimbursed Richard Hedreen in full, and asked Fairlight and Weiss to reimburse the auction house. Initially, Fairlight and Weiss refused to reimburse Sotheby on the basis that they believed the painting was authentic and further, that they were not involved in the sale at the auction house, so were not liable. At the first trial, Weiss settled prior and paid Sotheby $4.2 million, yet Fairlight maintained they should not have to refund the auction house.

The Commercial Court in December 2019 ordered Fairlight to pay a sum of $5.3 million, plus interest and legal fees to Sotheby, on the basis that Sotheby had “acted in accordance with the contractual framework” to which Fairlight were bound. At this trial, the Court did not comment directly on whether or not the painting was authentic, only on the contractual agreement the parties were bound to.

Last week, the case appeared back in Court as Fairlight attempts to appeal the order to reimburse Sotheby. In this appeal, James Collins, Fairlight’s lawyer, contended that there was no contractual relationship between Fairlight and Sotheby, and Sotheby merely acted as a “sub-agent” for Weiss. Sotheby’s lawyer counteracted this, stating that Fairlight gave Weiss “full authority” to enter into the contract, and the three were “partners in the project.”

Back in June, Sotheby informed the ‘Antiques Trade Gazette’ that they “are confident the Court of Appeal will uphold the first instance judgement”, a judgement in Sotheby’s favour.

A ruling is expected by the Court early next year.

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