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Sotheby’s must face Russian billionaire oligarch’s art fraud lawsuit

NEW YORK — A US judge said Sotheby’s must face part of Russian billionaire oligarch Dmitry Rybolovlev’s lawsuit accusing the auction house of helping his former art dealer overcharge him by hundreds of millions of dollars on 15 pieces of world-class art.

In a 76-page decision on Wednesday, US District Judge Jesse Furman said Sotheby’s must face fraud-related claims related to Salvator Mundi, a depiction of Christ attributed to Leonardo da Vinci, and works by Gustav Klimt, Rene Magritte, and Amedeo Modigliani.

Mr. Furman also let Mr. Rybolovlev pursue an aiding and abetting claim over Salvator Mundi, while dismissing fraud-based claims over works by Pablo Picasso, Auguste Rodin, Henri de Toulouse-Lautrec, and others.

The Manhattan judge also encouraged a settlement, saying a trial “would be expensive, risky, and potentially embarrassing to both sides.”

Since 2015, Mr. Rybolovlev, 56, has litigated in New York, France, Monaco, Singapore, and Switzerland over disputes with Yves Bouvier, an art dealer who helped him buy 38 artworks for about $2 billion over 12 years.

Mr. Rybolovlev said Mr. Bouvier charged hidden markups that led to more than $1 billion of overcharges, and Sotheby’s knowingly advanced the fraud on artworks it handled. He sued through his companies Accent Delight International and Xitrans Finance.

Sotheby’s said it had no knowledge of fraud. It also said that for most transactions it did not give Mr. Bouvier “substantial assistance,” and Mr. Rybolovlev sued too late.

In allowing the Salvator Mundi claims, Mr. Furman cited evidence that Sotheby’s knew Mr. Bouvier bought the painting for Mr. Rybolovlev, and its client manager worked with Mr. Bouvier to “adjust its valuation — over the objection of Sotheby’s own Old Masters expert.”

Mr. Rybolovlev eventually sold Salvator Mundi at Christie’s in 2017 for $450.3 million, a record price for a painting.

Sotheby’s and its lawyers did not immediately respond to requests for comment. Mr. Rybolovlev’s lawyer Dan Kornstein said: “We are looking forward to trial.”

Mr. Bouvier is not a defendant and has denied wrongdoing. A Swiss court last year reinstated a criminal investigation of him, following a request from Mr. Rybolovlev.

Forbes magazine estimates Mr. Rybolovlev’s fortune at $6.6 billion, mainly from Russian fertilizer producer Uralkali. — Reuters

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