Russian Billionaire and Sotheby’s Fight Over ‘The Lost Leonardo’ Painting

January 9, 2024 by

Sotheby’s abused its “privilege, power and reputation” to help dupe a Russian billionaire out of millions of dollars as he amassed a world-class art collection, a lawyer for the businessman argued on the first day of a closely watched trial in New York.

But the auction house says billionaire Dmitry Rybolovlev partly has himself to blame for allowing his old friend and Swiss art dealer Yves Bouvier to overcharge him for four rare works, including “Salvator Mundi,” a painting attributed to Leonardo da Vinci that set a record for the most expensive artwork ever sold in 2017.

The trial in Rybolovlev’s lawsuit against Sotheby’s began Monday before US District Judge Jesse Furman in Manhattan. The billionaire is seeking more than $232.5 million in damages.

“But money is not the only issue,” Rybolovlev’s attorney Daniel Kornstein said. “This is about public interest, it’s about people who are not just wealthy. Anyone could be a victim.”

The case will offer a rare glimpse into an often-opaque industry where middle men broker art transactions between ultra-wealthy buyers and sellers who don’t always know each other’s identities. It also marks one of the final chapters in a long line of legal challenges Rybolovlev has launched around the world, attempting to hold Bouvier liable for defrauding him.

In its defense, Sotheby’s argued it had no idea Bouvier was lying to Rybolovlev about protracted negotiations with sellers in a bid to inflate the prices Rybolovlev would pay for artworks, including $184 million for Klimt’s “Water Serpents II” painting.

“He has good reason to be angry at himself for what happened to him,” said Sara Shudofsky, an attorney for the auction house. While Rybolovlev had amassed immense wealth running profitable companies, when it came to purchasing art, he didn’t take basic steps to protect his interests, she added.

That included trusting that Bouvier was acting as his agent without putting the terms in writing. As a result, Rybolovlev claims, he didn’t know Bouvier was buying artworks through Sotheby’s and then turning around to sell them to him at significant markups.

On top of the $6.4 million commission Bouvier made in relation to the four artworks at the heart of this case, Bouvier also pocketed $164 million from secret markups, Kornstein said.

The legal saga began in February 2015 when Bouvier arrived at Rybolovlev’s residence in Monaco, thinking he was completing a deal for Mark Rothko’s “No. 6 (Violet, Green and Red),” which the billionaire had purchased for 140 million euros ($153 million) in August 2014. Instead, he was arrested on a complaint from the oligarch accusing Bouvier of overcharging him by about $1 billion for works by da Vinci, Rene Magritte and others. In the “Salvator Mundi” case, a company controlled by Bouvier bought the piece for $83 million and two days later, he sold it to Rybolovlev for $127.5 million.

The piece set the art world on fire in 2011 when it was publicly revealed at The National Art Gallery in London, several years after it was discovered at an estate sale in New Orleans. The story became the subject of the documentaryThe Lost Leonardo.

The two men tangled in court proceedings in New York, Singapore and Switzerland over the next eight years before resolving their dispute last month. The criminal charges against Bouvier in Monaco were eventually thrown out in 2019 by a judge who found that the arrest was tainted, and Rybolovlev was charged with corruption in 2018 by newly appointed prosecutors after friendly messages between the billionaire’s lawyers and authorities were revealed.

Two companies controlled by Rybolovlev sued Sotheby’s in October 2018 in federal court in New York, contending that it “materially assisted the largest art fraud in history.” The auction house in March won dismissal of most of the billionaire’s suit, but still faces claims that it aided and abetted fraud in the purchase of five works, including the da Vinci.

Staff members pose next to the ‘Salvator Mundi’ by Leonardo di Vinci in London. Photographer: Carl Court/Getty Images

“The question here that has broader implications beyond this case is whether an art advisor is a fiduciary of a collector,” said Judith Wallace, a partner at Carter Ledyard and chair of the firm’s art practice. “That’s often an issue that, if poorly defined, can lead to misunderstandings after the fact.”

Several well-known New York art dealers, including Nicholas Acquavella, Warren Adelson and Sandy Heller, are expected to testify, alongside Samuel Valette, who was Bouvier’s relationship manager at Sotheby’s.

Rybolovlev contends Sotheby’s provided Bouvier with valuations and helped the dealer acquire the works and sell the pieces at inflated prices. Bouvier had maintained he wasn’t Rybolovlev’s agent, but bought the paintings on his own and resold them to the Russian businessman.

Sotheby’s argues that it was unreasonable for Rybolovlev to rely on the broker’s statements without seeking documentation and that the company simply facilitated purchases of art by Bouvier from private sellers. The auction house contends it didn’t know about Bouvier’s alleged fraud or any lies he told about prices and didn’t help him commit misconduct.

“Sotheby’s sold the artworks at issue in this case to Bouvier’s company, who paid for them and took title,” an attorney for the auction house, Marcus Asner, said in a statement before the trial.

“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.”

Federal prosecutors spent more than a year building a case against Bouvier, but closed the investigation after the billionaire sold the da Vinci work in November 2017 for $450 million, more than triple what he paid, Bloomberg reported in May 2018, citing people familiar with the probe.

An attorney for Bouvier didn’t immediately respond to an email seeking comment.

Rybolovlev, 57, who has a net worth of $11.5 billion, made his fortune in the potash industry, selling two fertilizer producers for more than $7 billion in 2010 and 2011. He owns a majority stake in the AS Monaco football club and has been a resident of Monaco for more than a decade.

The case is Accent Delight International Ltd. v. Sotheby’s, 18-cv-09011, US District Court, Southern District of New York (Manhattan).

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