Dmitry Rybolovlev, president of As Monaco Football Club SA, arrives at court in New York on Jan. 9, 2024.
Bloomberg | Bloomberg | Getty Images
Russian billionaire Dmitry Rybolovlev on Tuesday lost a New York federal court lawsuit in which he had accused the Sotheby’s auction house of helping an art buyer defraud the oligarch by having him grossly overpay for various pieces of art.
A jury after several hours of deliberations found for Sotheby’s on all counts that Rybolovlev had alleged in the civil suit, which related to more than a hundred million dollars in purchases the 57-year-old fertilizer magnate made through art buyer Yves Bouvier.
Bouvier for more than a decade had acted as the billionaire’s agent, helping him buy 38 masterworks for more than $2 billion.
Rybolovlev’s suit in U.S. District Court in Manhattan said he believed that Bouvier was conducting “hard-fought negotiations with sellers” on his behalf, when in reality, he was inflating the actual sales prices by nearly 100%.
The suit said Sotheby’s, as a broker for the transactions, helped Bouvier “justify the fraudulent prices he charged” Rybolovlev’s companies Accent Delight International Limited and Xitrans Finance Limited.
“It knew the actual prices Bouvier paid to the sellers and the fraudulently inflated prices Bouvier induced Plaintiffs to pay to him,” the suit said.
Among the four artworks that were the subject of the trial was the Leonardo da Vinci painting “Salvator Mundi,” which Bouvier purchased from Sotheby’s for $83 million only to sell it a day later to Rybolovlev for $127.5 million. Rybolovlev later sold the piece at an auction through Christie’s in 2017 for $450.3 million, a record price for a painting.
At trial, Sotheby’s lawyer Sara Shudofsky told jurors that Rybolovlev was “trying to make an innocent party pay for what somebody else did to him.”
“Sotheby’s didn’t know anything about those lies,” Shudofsky said. “Sotheby’s had no knowledge of and didn’t participate in any misconduct.”
After the verdict in its favor Tuesday, the auction house in a statement said the decision “reaffirms Sotheby’s long-standing commitment to upholding the highest standards of integrity, ethics, and professionalism in all aspects of the art market.”
“We are grateful to the jury for its verdict, which totally vindicates Sotheby’s of any alleged misconduct,” Sotheby’s said.
“Throughout the trial, there was a glaring lack of evidence presented by the plaintiff and, as has been clear from the beginning, Sotheby’s strictly adhered to all legal requirements, financial obligations, and industry best practices during the transactions of these artworks.”
Rybolovlev’s lawyer Daniel Kornstein said, “This case achieved our goal of shining a light on the lack of transparency that plagues the art market. That secrecy made it difficult to prove a complex aiding and abetting fraud case.”
“This verdict only highlights the need for reforms, which must be made outside the courtroom,” Kornstein added.
Rybolovlev, who bought a Palm Beach, Florida, mansion from former President Donald Trump in 2008 for $95 million, settled his claims against Bouvier for undisclosed terms, the art buyers’ lawyers said last month.
Bouvier’s lawyers in a statement to the Associated Press earlier this month said that Rybolovlev’s legal claims against him had been rejected “by authorities around the world” in nine legal cases filed in Singapore, Hong Kong, New York, Monaco and Geneva.
Don’t miss these stories from CNBC PRO: