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The backstory: Besides his accomplishments in business, Russian billionaire Dmitry Rybolovlev is also recognized for his extensive art collection. He made headlines in 2017 for selling Leonardo da Vinci's “Salvator Mundi" to Saudi Crown Prince Mohammed bin Salman (MBS) through Christie's auction house in New York for US$450.3 million, breaking the world record for any work of art sold at auction.
But the trouble began in 2015 when Yves Bouvier, part of Rybolovlev's art dealings, was arrested after being accused by Rybolovlev of buying artworks and then selling them at overinflated prices to make huge profits. Essentially, Rybolovlev says Bouvier told him he could save him money by acting as his agent in negotiating art purchases.
Rybolovlev chased Bouvier through courts in multiple places, like Hong Kong, New York, Singapore and Switzerland, over the next eight or so years, saying he was overcharged by about US$1 billion for various artworks by da Vinci, Rene Magritte and others.
More recently: After settling the long-running dispute with Bouvier last month, Rybolovlev is now suing Sotheby's. The accusations focus on Sotheby's allegedly assisting Bouvier in inflating the values of 16 artworks, including "Salvator Mundi," the priciest artwork ever sold. The painting became big news after being discovered at an estate sale and was also the subject of the documentary “The Lost Leonardo.”
The development: Sotheby's trial for fraud started in a Manhattan federal court on Monday. Sotheby's denies wrongdoing, saying it didn't know about Bouvier's questionable actions. Rybolovlev is seeking US$232.5 million in damages. Bouvier is not a defendant in the Manhattan trial.
In court, Sotheby's lawyer, Sara Shudofsky, told the jury that Rybolovlev was trying to make an innocent party pay for someone else's actions, pointing out the billionaire's mistakes in protecting himself during these art purchases. The auction house says it had no idea Bouvier was lying to Rybolovlev about tough negotiations with sellers in order to inflate the prices.
On the other side, Rybolovlev's lawyer, Daniel Kornstein, accused a Sotheby's executive in London of being part of the shady deals, alleging the auction house chose greed by participating in the alleged fraud. They’re also arguing that Sotheby’s even inflated the valuation of artworks in official communications in order to make sense of Bouvier’s prices.
“Sotheby’s has repeatedly stated that it had no knowledge of what transpired between Dmitry Rybolovlev and Yves Bouvier and did nothing to cause Mr. Rybolovlev any alleged harm,” said Sotheby’s in a statement.
“If Mr. Rybolovlev has a valid gripe, it’s against Bouvier, not Sotheby’s, because Mr. Rybolovlev is claiming that Bouvier’s the one who allegedly lied to him about the prices he, Bouvier, paid to buy the art,” said an attorney for Sotheby’s.
“As a result of participating in the fraud, Sotheby's made a lot of money,” said Rybolovlev's lawyer Daniel Kornstein. “Sotheby's had choices, but they chose greed.”
“But money is not the only issue,” Kornstein said. “This is about public interest, it’s about people who are not just wealthy. Anyone could be a victim.”
“The client is looking forward to the trial. For the first time, all the evidence will be presented. For the first time in nine years, Mr. Rybolovlev will speak publicly and provide a detailed account of the truth about this case,” said Kornstein.
“The allegations being made against Mr. Bouvier in the New York proceedings have already been rejected by authorities all around the world,” said attorneys for Yves Bouvier. “Since starting legal action against Mr. Bouvier in 2015, all nine of the court cases filed in Singapore, Hong Kong, New York, Monaco and Geneva have been discontinued by the authorities.”