Art acts as a powerful medium for expression, cultural preservation and social commentary. It has existed for several thousand years and found in different forms, essentially beginning when humas first started expressing themselves. It was simple then, with early humans painting on cave walls, scenes of daily life and rituals. Over time, artists started relying on the sale of their crafts and society began to attribute economic value to creative works transforming art from just an expressive output into a significant commercial asset. Fast forward to where we are now, art is a multi-billion-dollar industry with an ecosystem comprising of artists, collectors, curators, galleries, auction houses supported by service providers such as insurers, experts in authentication, provenance and facilities providing storage.
As is with any commercial activity with so many stakeholders, disagreements are inevitable. These could range from ownership, authenticity or provenance to sale and contractual disputes including breach of contract, loss of sale among others. There are several cases in the public domain, including in India most recently, where a painting, believed to be his last by the famous 19th century painter Raja Ravi Verma, is in the middle of several ownership claims. There is also the example of the erstwhile renowned and one of the oldest art museums, the Knoedler Gallery in the United States, which closed following revelations that it had sold several fake paintings, resulting in numerous lawsuits which were eventually settled.
While the above examples are from national courts, for many reasons, I would argue that arbitration is perhaps the most suitable and effective method for resolving disputes involving art. Plainly defined, arbitration, is a form of alternative dispute resolution (that also includes mediation, conciliation and negotiation) where parties resolve legal conflicts outside of traditional courts by submitting their dispute to a neutral third party, called an arbitrator who makes a binding decision in the form of an award. Such arbitration may be under the procedural rules of institutions such as the International Chamber of Commerce (ICC) or ad-hoc, which is without institutional oversight.
Given that art related disputes can involve multiple parties across jurisdictions, arbitration provides the flexibility of choosing the law governing the contract, language of arbitration, number of arbitrators and the seat of arbitration. Seat is important as it determines the national courts that will have supervisory jurisdiction to assist, intervene or hear challenges to the final award, if any. Singapore has long been a preferred seat of arbitration given its acceptance as a neutral jurisdiction, strong legal framework and deep respect for rule of law. More importantly, one of the key factors for choosing arbitration as a means of resolving disputes is the prospect of a more streamlined and predictable enforcement process across jurisdictions with limited grounds of challenging awards, ensured mostly by the global recognition and acceptance of the New York Convention of Enforcement of Arbitral Awards 1958 (New York Convention) which has been acceded by more than 170 countries, including Singapore. Conversely, enforcement of foreign court judgements is often tied to reciprocity with broader grounds for review and can be more challenging.
Finally, arbitration also offers the advantage of being able to choose an arbitrator, who can be an expert with specialised knowledge of art, cultural heritage, dynamics of the international art market thereby offering a more informed, efficient and sensitive mechanism for resolving art-related disputes. Finally, given the high stakes often involved in the art world, reputation and confidentiality are paramount. Arbitration being a confidential mechanism preserves the identity of the parties and the art in question, reducing risks of devaluation and adverse publicity.
Considering the above, there is a strong case for arbitration when negotiating agreements relating to artworks – be it sale and purchase contracts, insurance policies, or loan arrangements. Without such a clause, or a later agreement between the parties, the necessary conditions for resolving the dispute through arbitration are unlikely to be satisfied and may lead to multiple or prolonged claims in the courts as was illustrated in the high profile case with Russian billionaire Dmitry Rybolovlev initiating court proceedings in several countries including Singapore claiming he was defrauded by inflated prices of the art purchased. The case was finally settled in 2023 after 9 years. However, it is pertinent to mention that while Fraud is generally arbitrable, jurisdictions differ in their approach to what can be arbitrated and hence it is wise to seek counsel when drafting contracts depending on the nationality of parties, law governing the contract among others.
For further information, please contact:
Tejus Chauhan, International Chamber of Commerce
icc@iccwbo.org
- The author is the Director, Arbitration and ADR, South Asia for ICC Dispute Resolution Services and based out of ICC’s case management and promotion office in Singapore. The views expressed in this article are of the author and do not necessarily reflect the views of the ICC.
- Why an ownership battle over Raja Ravi Varma’s ‘last’ painting has reached Delhi High Court
- Knoedler Gallery and Collectors Settle Case Over Fake Rothko – The New York Times
- The Sprawling Legal Dispute Between Yves Bouvier and Dmitry Rybolovlev Is Finally Over
