There’s a new international arbitral court in town.
A collaboration between the Authentication in Art (“AiA”) foundation and the Netherlands Arbitration Institute (“NAI”), the Court of Arbitration for Art (“CAfA”) is located in The Hague and is the first tribunal of its kind. CAfA was established in 2018 to hear art law disputes, exclusively. These disputes include authenticity disputes, ownership and contract matters, and intellectual property/trademark cases. CAfA aims to provide recourse to parties with art disputes to settle without needing to resort to traditional national courts.
The facts of art law disputes tend to have several features in common. For one thing, information asymmetries often exist between buyers and sellers, and parties may be anonymous, leading to an overall lack of transparency in the market. In restitution cases, the last documented ownership might be decades or centuries old, and “handshake deals” have had precedence over formal contracts for much of the history of art sales. Attempts to impose laws upon the market that do not mesh with existing practices or are seen as ill-informed have been “largely ignored by those active in the arts, who follow customs and practices prevailing for hundreds, even thousands, of years.”
According to William Charron, a partner at Pryor Cashman and a co-founder of CAfA, a driving force behind the establishment of the court was the realization that traditional court systems were ill-equipped to handle art authentication cases in a way that the market would find acceptable. The particular nature of the art market , Mr. Charron explains, means it is not always predictable what reaction the market will have to traditional courts’ determinations of provenance and how much weight the market will place on this determination. Mr. Charron found that courts, “being reactive bodies, do their jobs of weighing the evidence presented to a ‘more likely than not standard,’ but they do not actually authenticate art.” The idea is that the creation of a tribunal composed of industry experts who better understand the types of evidence the art world holds in higher and lower regards will result in a tribunal whose decisions the market is more likely to accept. CAfA is also distinguishable from traditional national courts because its expert witnesses will be tribunal-appointed, making the evidence-gathering process less adversarial and leaving less room for doubt following the tribunal’s decision.
Numerous historical examples of international art disputes exist, and highlight the shortcomings of the traditional court system as it deals with art. Many high-profile cases arose out of the restitution of art stolen by Nazis from Jews or others during the Holocaust. Far from possessing straightforward claims, descendants of the victims of Nazi looting commonly spend decades in litigation. Nicholas M. O’Donnell, a specialist in these types of cases, offers examples that typify the legal hoops through which plaintiffs must typically jump. In an ongoing case, the Nazi government’s Chamber of Visual Arts acquired a painting in a forced sale under coercive means. After the war, the painting was discovered hanging in a museum in Spain, ostensibly in the possession of the Spanish government. Because of a dispute about whether Spanish or American law applies, as well as jurisdictional issues because of the Foreign Sovereign Immunities Act, the case remains unresolved.
Another controversial lawsuit raises issues of authentication. A private individual, Lancelot William Thwaytes, brought suit against the Sotheby’s auction house in British court for claims arising out of the sale of a painting. When Mr. Thwaytes had the painting appraised for sale by Sotheby’s, he was told it was a 17th century copy of a Caravaggio, and sold it via Sotheby’s for £42,000. The purchaser, a leading Caravaggio scholar and a consortium of dealers in Old Masters, however, announced that according to their analysis of the painting in question it was a genuine Caravaggio, worth approximately £1 million. After considering questions on the standard of care owed by an auction house to a client and negligence, the court concluded that Sotheby’s was not negligent. Relevant for our purposes here, though, is the fact that this judgment was very fact-specific – the judge was “primarily concerned with the question of whether there were any features or ‘red flags’ visible in the Painting by way of visual or technical examination that should have been spotted by Sotheby’s and which indicated that the painting had ‘Caravaggio potential’.” Such a fact-specific determination raises again the value of having an expert tribunal, trained or at least experienced in art cases and knowledgeable about the kind, relevance, and evidentiary value of indicators of provenance.
The legal difficulties evidenced in these cases emphasize the need for an international, neutral venue that employs arbitrators experienced in dealing with this kind of case. These cases appear with greater frequency in today’s increasingly globalized art market, as well as with the rising trend in high-quality, difficult-to-detect art forgery.
They say that good artists are never appreciated in their own time. If the global trend toward alternative dispute resolution is any indication, however, the same will not be true for CAfA.