Sotheby’s, Russian billionaire Rybolovlev agree to mediate art fraud case

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SALVATOR MUNDI, a painting attributed to Leonardo Da Vinci, is one of several involved in a case of alleged art fraud between Russian billionaire Dmitry Rybolovlev and Sotheby’s auction house. — WIKIPEDIA.ORG

NEW YORK — Sotheby’s and Russian billionaire Dmitry Rybolovlev have agreed to mediation to try to resolve the oligarch’s art fraud lawsuit against the auction house.

Mr. Rybolovlev accused Sotheby’s of helping his former art dealer, Switzerland’s Yves Bouvier, acquire 15 pieces of world-class art for which Mr. Rybolovlev paid more than $1 billion.

Mr. Bouvier charged hidden markups that caused Mr. Rybolovlev to overpay by hundreds of millions of dollars, the lawsuit alleged.

A letter that Mr. Rybolovlev’s lawyer filed on Monday in Manhattan federal court said “the parties jointly report that we have conferred about the prospect of settlement and have agreed to proceed by mediation with a magistrate judge.” The letter was filed five days after US District Judge Jesse Furman said Mr. Rybolovlev could pursue fraud-related claims over four works including Salvator Mundi, a depiction of Christ attributed to Leonardo da Vinci.

Mr. Furman dismissed claims over 11 of those works and encouraged both sides to settle and avoid an “expensive, risky, and potentially embarrassing” trial.

Sotheby’s has said it had no knowledge of fraud. Mr. Rybolovlev sued through his companies Accent Delight International and Xitrans Finance.

In Monday’s letter, both sides said Mr. Furman had recommended a magistrate judge whose niece works at Sotheby’s law firm.

They asked that another judge be assigned “out of an abundance of caution.”

According to court papers, Mr. Bouvier bought Salvator Mundi for $83 million in 2013 and quickly sold it to Mr. Rybolovlev for $127.5 million. Mr. Rybolovlev went on to sell Salvator Mundi at Christie’s in 2017 for $450.3 million, a record price for a painting. — Reuters