Art Litigation - YTL LLP

Recent English Decision

Qatar Investment and Projects Development Holding Co v Phoenix Ancient Art SA. [2023] 7 WLUK 300

Introduction

In May 2013, the Plaintiff purchased a statuette of Nike, the Greek goddess of victory. The purchase price of this artefact was around US$2.2 million. It was said to date from the 4^th or 5^th century AD. The sales agreement was subject to English law and stated that the item was from the fifth century, had been acquired by the Defendant in 1982. In 2019, the Plaintiff raised concerns about the item’s authenticity based on findings of modern machine markings on it. The Plaintiff alleged that this item also of modern manufacture and worth a tiny fraction of the price paid.

The Plaintiff served a claim form in October 2020 alleging that Defendant had been negligent and was in breach of contract. A trial date in 2023 was set. The Defendant’s position was that the statuette was genuine. It denied that there had been any negligence or breach of contract and said that the agreement had excluded liability and that the Plaintiff had relied on expert examination of the statuette.

The Plaintiff successfully applied to have three further defendants joined to the claim, namely two co-founders of the Defendant and a Swiss art dealer.

Present action

In the present action, the Plaintiffs sought to add claims of deceit, fraudulent misrepresentation, and unlawful means conspiracy. They said that new causes of action had come to light recently following the publication of reports in 2022 and 2023 into allegations that the defendants had been involved in smuggling artefacts and creating false documents.

The defendants were based in Switzerland and New York and challenged jurisdiction on the basis that as tort law generally required damage to be suffered in the relevant jurisdiction, and the statuette had been inspected and stored in New York, there was no connection with England and Wales, save for the sales agreement.

The English Court accepted that the claimants were seeking to clarify the existing case for the avoidance of doubt. That could have been done earlier, but they had taken time to seek and adduce new evidence. The Court held that 2022 and 2023 reports of dishonesty by the defendants were admissible as similar fact evidence, and the amendments proposed by the Plaintiffs did not represent an abuse of pleadings.

On 20 July 2023, the English Court held that the Plaintiffs had a good explanation for the delay in pleading the new causes of action. There were clear facts on which the claimants proposed to rely. The new claims crossed the threshold of having a real prospect of success. The English Court allowed the Plaintiff’s amendments.

Key Takeaways

It is important to note that art litigation can be complex and involves various legal and factual considerations. Some common causes of action in art litigation include:

Breach of Contract – Disputes may arise when one party fails to fulfill the terms of a contract relating to the purchase, sale, consignment, or commissioning of artwork.
Negligence – Negligence claims can arise if a party fails to exercise reasonable care in handling, storing, or transporting artwork, resulting in damage, deterioration, or loss of value. Negligence can also apply to appraisals, authentication, restoration, or conservation services.
Deceit – in the context of art litigation refers to fraudulent or deceptive practices related to the sale, purchase, or authentication of artwork. It involves intentional misrepresentation or withholding of material facts with the intent to deceive another party and induce them to act to their detriment.
Fraudulent misrepresentation – refers to a deliberate and false statement or representation made by one party to another during the sale, purchase, or authentication of artwork. It involves intentionally providing misleading information, concealing material facts, or making false statements with the intent to deceive the other party and induce them to act to their detriment.
Unlawful means conspiracy – where the claimant proves that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so.

If you wish to find out more about this article or to learn more about our services in art law, please contact us.

Alfred Leung, Partner (alfredleung@hkytl.com; 852 3468 7202)