ARBITRATION IN THE ART WORLD AND THE COURT OF ARBITRATION FOR ART: HEADING TOWARDS A MORE EFFECTIVE RESOLUTION OF ARTS DISPUTES?

Author:Kadhim, Noor
 
FREE EXCERPT
  1. INTRODUCTION

    There is no autonomous field of law that can properly be characterised as 'art law' because the term and domain are wide and all-encompassing. Therefore there is no such thing as a typical arts dispute. Although an artwork may be implicated in a dispute, the claim itself is usually related to issues of social status, property ownership, history and reputation, or culture. In the same way that sports law has been said either not to exist because it is more aptly an amalgamation of other laws, or that it does not stand on its own because it is influenced by other fields of law, (1) art law is a nebulous and polymorphous creature that is not stand-alone but is dependent on the evolution of different laws, and concepts that are invariably interrelated. This is a major part of the problem in attempting to find a singular forum for the resolution of arts disputes. Also, art can and does easily cross physical boundaries. This results in a discrepancy of legal treatment and classification depending on which jurisdiction the artwork is in or becomes located. (2)

    This article discusses the viability of arbitration to resolve specific types of arts disputes, being title and authenticity claims. It then considers the available institutions with claimed expertise to administer such disputes. In particular, the Court of Arbitration for Art ('CAfA') will be considered and its key provisions will be explained. The CAfA is a specialised institution that was established in 2018 to address a perceived gap in the arbitral institutional framework for providers of expert-led solutions for disputants in the artistic and creative industries.

  2. AUTHENTICATION CLAIMS

    As it was partly the brainchild of the Authentication in Art Foundation 'AiAF') which cofounded it, the CAfA was likely initially created with authentication disputes specifically in mind. Its remit was soon thereafter expanded to include all types of art disputes. The nature of authentication disputes is that they are very technical and will invariably lead to the judge(s) relying heavily on the opinion of an expert--or more than one--who has devoted many years of study to the artist in question, to determine whether a work is a fake or a forgery.

    The first potential motivator for creating a specialised forum for the resolution of arts disputes is that manipulations and forgeries are becoming more and more sophisticated, and it requires a fine eye and understanding of the historical context to filter the frauds from the real deal. If the CAfA can recommend to tribunals a pool of genuine and credible experts in authentication thanks to its network and expertise, it will allow those tribunals to arrive at a more reliable decision on what is acknowledged to be a very challenging and expertise-led area of law.

    The second is related to the first: there is usually only a handful of authenticators in the world who are trusted by those in the art market and they are diminishing because they are concerned about the legal implications if they are potentially found liable for wrongfully authenticating or refusing to authenticate artworks. A case in point is the Warhol Foundation which until its closure was the only arbiter of what was a genuine Warhol. This was until it was faced with a string of lawsuits, some of which have challenged its authentication procedures, which then motivated it to close. (3)

  3. TITLE CLAIMS

    Another type of dispute for which arbitration could solve some challenging issues is title claims. There are two types of title claim for which this is relevant.

    The first is restitution claims such as those regarding Nazi-spoliated art. The famous example of a very public arbitration in the art world is the case between Maria Altmann and the Republic of Austria for recovery of five Gustav Klimt paintings from the Austrian government museum where they were housed after the Nazis were alleged to have stolen them from her relatives. (4) It is probably the only well-known example of a high-profile arbitration in this field. Ironically, it was a claim that was started in the Californian courts but for various reasons--including financial (5)--was then transferred to an arbitration with the consent of the parties.

    The second type of title dispute relates to theft or wrongful sale claims. In those cases there are grey areas where the sale or transfer in question has not been recorded in a register of title in which it can be verified whether the seller had title to sell. This could include a land registry, for high value transfers of land, capable of recording art sales (such as exists in the USA). For similarly high value transfers of art in the United Kingdom, where this article is written, it may be surprising to learn that no public register or transparent way exists to check title or conduct proper due diligence. As far as globally known initiatives are concerned, there is only the Art Loss Register which was founded by individuals, and that is a private enterprise which is not overseen by public institutions or the government.

    The use of block-chain technology as a de-nationalised and presumably transparent system which cannot easily be manipulated due to the absence of a sole access point, could potentially provide a solution. However, who is ultimately to decide these disputes? Surely rather than judges, it should be arbitrators versed in the different laws that may apply depending on where the artwork has crossed boundaries, potentially. Failing which, in the future if block-chain is developed as a method of recording such transactions, it should perhaps be technological specialists, who understand both the business of art, the culture of the parties and application of the relevant rules of law from different jurisdictions.

    Disputants in the art world need to have trust and confidence in the ability of the adjudicators to understand both the business as well as the law. In title disputes, often creative solutions need to be found to accommodate a variety of different interests that a straightforward litigation dictated by one set of rules or procedure, cannot solve. Arbitration could provide the panacea.

  4. ARBITRATION AS A MEANS TO RESOLVE AUTHENTICATION AND TITLE DISPUTES

    Arbitration has been said to combine the features of judicial settlement with the flexibility of non-regulated, more specialised procedures. Although on the one hand the process possesses the formality of court decisions as arbitral decisions are final and binding, arbitration proceedings are not determined by fixed procedural and substantive rules. This flexibility appeals to arts disputes because the disputants are often from different cultures and backgrounds. Professor John Merryman once proclaimed that:

    many problems of international trade might more easily be solved by arbitration tribunals than by state courts because arbitrators are extra national and can avoid cultural nationalism and because they are likely to have more expertise than judges of state courts. (6) Although there are not many reported mediations or arbitrations in this field, because a key and desirable feature for the disputants is their confidentiality, fresh attention is being paid to examine new ways in which arts disputes could best be resolved. In some cases, an arbitration clause may be inserted in international contracts involving an artwork, such as loans, sales, and insurance contracts.

    The problem is that for most title and authenticity disputes between private individuals or lesser known galleries or dealers, contracts are rarely concluded in writing. When they are, they are rarely well drafted. For the most part, transactions are still being effected on the back of a handshake. This author commented on this area in an article that appeared in the August 2014 edition of the International Journal of Arbitration, Mediation and Dispute Management in the Chartered Institute of Arbitration publication, (7) and it appears that little has changed in the five years that have passed. In addition, where art passes hands, the ultimate buyer may not have concluded the original contract with the seller--or indeedlex there may be a chain of sellers--and therefore cannot be said to have concluded an arbitration agreement with the proposed respondent that would unlock the route to arbitration. In such cases, the threshold conditions for utilising arbitration will not exist and the discussion below will be academic. Assuming that the threshold conditions of jurisdiction and arbitrability are met, we will analyse below whether arbitration does in fact produce a satisfactory solution for arts disputes.

    Arbitration has four key features which may predispose it to the settlement of arts disputes: certainty, confidentiality, flexibility and the ability to select expertise. These features will be examined in turn.

    4.1 Certainty

    To insert a comprehensive and well drafted arbitration clause into a contract concerning artwork is to signal to the courts of every jurisdiction that the parties wish to apply their own predefined rules to the dispute and not to have a State-appointed and affiliated judge determine whether it is to be decided in the courts of a biased, potentially inexpert, or irrelevant jurisdiction. In which ways does this engender more certainty for the parties?

    First, it can instil certainty in the process itself. An arbitration clause where drafted with clarity reduces scope for different courts to attempt to take jurisdiction in respect of the same subject matter...

To continue reading

REQUEST YOUR TRIAL