Back

Litigation v. Artful Resolution: Using ADR Methods to Resolve Art-Related Disputes

December 12, 2023

By Lauren Gowler

Picture this. You’ve recently purchased a rare Picasso painting from an auction house for millions of dollars. Your new prized possession has come with a “certificate of authenticity,” but soon after the leading expert on Pablo Picasso remarks that the painting may be inauthentic. This expert, who assembles the catalog raisonne, decides to remove the painting from this listing. Scholars, art professionals and the public begin to question the authenticity of your painting, your reputation as a collector, and the auction house who sold it to you. Amidst all of this controversy, the painting’s value has now greatly diminished. With these issues at hand, what do you do?

When conflicts related to ownership or authenticity arise, parties have historically opted to resolve their disputes through litigation. However, there are a number of downsides to litigation that pose real problems for the art world: (1) court proceedings are public forums that offer little confidentiality for litigants seeking to protect their reputation; (2) art-related disputes are often internationalized – requiring parties to bring claims in foreign, unfamiliar jurisdictions; (3) court remedies may fail to satisfy non-conventional stakeholders — such as Indigenous peoples — who may seek the return of religious items or other forms of reconciliation; (4) the courts are not well equipped to adjudicate art specific cases, such as when judges are asked to decide on an artwork’s authenticity.^{^[1]}

Alternative forms of dispute resolution (ADR) – such as mediation, arbitration, and expert determination – have become more relevant and address some of the shortcomings of litigation. ADR processes offer the parties more control over the resolution of their dispute, the opportunity to jointly select an appropriate third party to assist, and the ability to craft creative solutions that respond directly to their interests.

MEDIATION

Mediation allows for a neutral third person to assist the parties in reaching a mutually satisfactory agreement.^{^[2]} Norman Palmer, an art lawyer, suggested that: “mediation seeks to resolve disputes, not according to the legal analysis and redress for past conduct but according to the identification of common ground, the development of future relationships, and the attainment of future goals.”^{^[3]}

In mediation, there are no prescribed rules of procedure. Parties have control over where and when the mediation takes place, the processes they will use, and the issues to be dealt with.^{^[4]}

The mediator is neither a judge nor an arbitrator; he or she neither decides the outcome nor imposes any solution. The mediator is there to assist the parties in staying on track – by setting an agenda; ensuring that topics are addressed at the appropriate time; and summarizing the issues which the parties have found agreement on.^{^[5]}

Mediation allows parties to tackle sensitive non-legal issues, generally not addressed in the courts. All the intricacies of an art dispute can be discussed – such as the commercial, cultural, or political concerns that may relate to an art object. Mediation can also address disputes that can’t be brought in court, like restitution claims for Nazi-looted artwork that may be statute barred. On a more personal side, parties may want the opportunity to share their feelings or grievances directly with the other side and have that party acknowledge their perspective.^{^[6]} Given the confidential nature of mediation, parties are better able to preserve their reputations, the esteem of their contemporaries, and the value of an artwork while the matter is under dispute.

In 2006, Zurich and St. Gall reached a settlement through mediation over the ownership of 35 medieval manuscripts and a wooden globe.^{^[7]} This dispute involved the removal of cultural objects from the Abbey Library of St. Gall to Zurich. For centuries, St. Gall sent requests for the return of these items, but Zurich was adamant that title for the objects had been validly transferred. Starting in the late 1990s, negotiations commenced for eight years to no avail. It was only with the help of a Swiss mediation-team that the parties were able to set aside their legal positions and instead focus on their mutual interests. St. Gall accepted Zurich’s ownership of the items, while Zurich recognized the importance of the objects to St. Gall’s cultural identity and offered to loan the manuscripts to the Abbey Library.^{^[8]} The parties were able to analyze the issues at hand, and split interests into “title” and “use” of the objects. This is an example of how mediation can offer creative, “win-win” solutions.

ARBITRATION

In arbitration, parties agree to submit their dispute to an “arbitrator” – a neutral third party – who is granted the power to render a binding decision on their conflict.^{^[9]} The parties are given the opportunity to present their case by providing testimony, giving evidence, and questioning witnesses. However, the parties have the flexibility to shape the process to fit their needs – allowing the parties to jointly control the timetable of the proceedings, limit document disclosure, and discuss how confidential the proceedings should be. The parties can also select which system of substantive law should be applied or direct the arbitrators to decide the resolution according to principles such as “equity” or “good conscience.”^{^[10]} Once the parties mutually agree to enter into arbitration, neither party can unilaterally withdraw from the proceedings and are legally bound to accept the arbitrator’s final decision.

It can also be helpful for parties to have an arbiter who has expertise and knowledge in the area of art and cultural heritage. To address the growing need for specialized adjudicators, a new tribunal called the Court of Arbitration for Art (CAfA) officially opened in 2018.^{^[11]} By involving leading industry arbitrators, mediators and experts, CAfA aims to increase the quality of the decision making and the market acceptability of the outcome of disputes. CAfA’s 223 arbitrators have extensive experience with dispute resolution, and specialization in areas such as art authenticity, restitution of cultural property, insurance or sale transactions related to fine art – to name a few.^{^[12]}

Another unique feature is that CAfA assembles an “Expert Witness Pool.”^{^[13]} CAfA selects and carefully vets individuals as “experts” – those who possess significant experience in the field of cultural heritage, art conservation, materials analysis, or provenance research.^{^[14]} Typically in arbitration, the parties would select their own expert witnesses. However, in cases involving authenticity, it’s the CAfA arbitrator who appoints the forensic and provenance experts from its roster, rather than hear experts brought forward from competing sides. The motivation behind this is to reduce the bias of paid experts and better ensure that the analysis is as objective as it can be.^{^[15]} CAfA expert’s loyalty is to the arbitration panel and to the truth they uncover in their analysis. This works to reassure the art market that authenticity decisions are based on objective well-supported analysis.

While the proceedings are private, at the end of arbitration, CAfA’s arbitrators publish a written opinion explaining how they reached their decision. While the names of the parties are kept confidential, the artwork is identified. This limited release of information is to ensure the art market’s understanding and acceptance of the final determination.^{^[16]}

The most famous art arbitration concerned Maria Altmann and her efforts to recover six Gustav Klimt paintings from the Republic of Austria.^{^[17]} These paintings originally belonged to her uncle and aunt but were confiscated by the Nazis in 1938, eventually ending up in the Austrian State Gallery in Vienna. In 1999, Maria Altmann sought the return of these works through Austria’s Restitution Committee, but her claim was denied. Altmann proposed to submit the dispute to arbitration, but the Republic of Austria refused to participate. She decided to resort to the American courts, alleging that Austria expropriated property in violation of international law. Ultimately, the Supreme Court overruled the jurisdictional immunity exception pled by the Republic of Austria and granted Altmann the authorization to bring a civil action against Austria in the US federal district court.^{^[18]} Confronted with the prospect of another long and expensive litigation, both parties agreed to arbitration. The parties tasked the arbitration panel with ruling on the ownership status of the Klimt paintings and further agreed to apply Austrian substantive and procedural law. Ultimately, the arbitral panel held that Austria was required to return five of the paintings to Altmann, while it found that the sixth painting was the property of the Republic of Austria.^{^[19]} Regrettably, and perhaps cautionary, despite her success, Maria Altmann was forced to sell the works to cover all the costs related to the lengthy previous litigation.

EXPERT DETERMINATION

Expert determination is another informal private dispute resolution method that features the expert as the decision-maker rather than as the expert witness. Often parties turn to this ADR method when they want to settle a term of a contract, decide a discreet technical issue, or resolve a question of fact. For example, the parties may ask an appraiser to value a sculpture or get a scholar to give their opinion on the authenticity of a painting. Similar to the other ADR methods, expert determination is a consensual, confidential, and flexible procedure.

Generally, these experts possess profound knowledge of an artist’s work or a communities’ cultural objects – formulated from academic scholarly research and lifelong practical experiences. This training assists them in providing an opinion on a work’s authenticity, attribution, or valuation. An expert is allowed (and often expected) to use his or her own expertise and background knowledge, whereas an arbitrator is restricted to the evidence submitted by the parties.

While the art market, the law, and the collector demand definite “yes-or-no” answers, it can be incredibly difficult for experts to be absolutely certain on the authenticity of a work. As a result, experts may be reluctant to voice their opinions given that they could be sued for disparagement, defamation, fraud or misrepresentation – if their determination proves to be wrong.

An expert’s determination can be considered binding or non-binding. If the parties agree that the expert is only allowed to evaluate the facts and make a “recommendation” to the parties, the severity of some of the concerns canvased may lessen.^{^[20]} Even if the expert’s conclusions are not binding, this advice can help parties re-evaluate their positions, and if no agreement is reached, they can still avail themselves of litigation or other forms of ADR.

CONCLUSION

While the art world has been slower than other industries to adopt ADR methods, the emergence of international organizations offering mediation, arbitration, and expert determination services and resources is encouraging. This is especially important given the increased effort to repatriate looted colonial-era art and cultural artifacts. We can clearly see how forms of ADR are being used to resolve the art disputes in our world today. On December 5, 2022, The Art Newspaper revealed that George Osborne, chair of the British Museum, is in the “advanced stages of negotiation” with Greece over the return of the Parthenon Marbles.^{^[21]} This particular dispute is over 200-years old. In 1801, with permission of the Ottoman authorities, British ambassador Lord Elgin shipped the massive marble sculptures to London for “safe-keeping” in the British museum. Despite Greece’s urging, Britain has traditionally held steadfast in its position that it legally acquired the sculptures and has refused to restitute the pieces back to Greece. Through the implementation of ADR methods, it appears a solution is being forged between the two parties. On November 28, 2022, Greek prime minister, Kyriakos Mitsotakis stated that “a win-win solution can be found that will result in the reunification of the Parthenon sculptures in Greece, while at the same time taking into account concerns that the British Museum may have.”^{^[22]} A British Museum spokesperson commented that the museum has publicly called for a new Parthenon Partnership with Greece: “we’re willing to speak with anyone, including the Greek government, about how to take that forward…we are seeking a new positive, long term partnership with countries and communities around the world, and that of course includes Greece.”^{^[23]} This sentiment reflects the progress derived through alternative means – an outcome seemingly not previously attainable through traditional litigation.

Sources:

Anna Bolz, A Regulatory Framework for the Art Market? Authenticity, Forgeries and the Role of the Art Experts, (Springer Cham, 2022) at 236 online: <https://doi.org/10.1007/978-3-031-18743-8> [Bolz]. ↑
Government of Canada, Mediation (25 August 2022) online: Dispute Resolution Reference Guide <https://www.justice.gc.ca/eng/rp-pr/csj-sjc/dprs-sprd/res/drrg-mrrc/04.html>; also LAW 3170 Dispute Resolution Lecture on “Mediation” delivered by Professor Jennifer Schulz and Professor Katerina Standish (Faculty of Law, University of Manitoba, October 5, 2022) [Mediation Lecture]. ↑
Norman Palmer, Museums and the Holocaust: Laws, Principles, and Practice (Institute of Art and Law 2007) at 107. ↑
Mediation Lecture, supra note 2. ↑
Alan Scott Rau, Mediation in Art-Related Disputes in Proceedings of the Art Law Center’s Symposium on Resolution Methods for Art-Related Disputes, Geneva, 1997 (Zurich: Schulthess Polyraphischer Verlag AG, 1999) at 77 [Rau]. ↑
Ibid. ↑
Anne Laure Bandle, Raphael Contel, Marc-André Renold, Case: Ancient Manuscripts and Globe – Saint-Gall and Zurich on Platform ArThemis (Art-Law Centre, University of Geneva) online https://plone.unige.ch/art-adr/cases-affaires/ancient-manuscripts-and-globe-saint-gall-and-zurich. ↑
Ibid. ↑
Government of Canada, Arbitration (25 August 2022) online: Dispute Resolution Reference Guide https://www.justice.gc.ca/eng/rp-pr/csj-sjc/dprs-sprd/res/drrg-mrrc/06.html. ↑
Alessandro Chechi, “Chapter 30: Alternative Dispute Settlement Mechanisms” in The Oxford Handbook of International Cultural Heritage Law, ed. by Francesco Francioni and Ana Filipa Vrdoljak (Oxford: Oxford University Press, 2020) at 725, online: <https://doi.org/10.1093/law/9780198859871.001.0001> [Chechi]. ↑
The Court of Arbitration for Art (CAfA) was officially launched by the Netherlands Arbitration Institute (NAI) in conjunction with The Hague-based Authentication in Art (AiA) at the AiA Congress on June 7, 2018. ↑
Court of Arbitration for Art, “Arbitrator Criteria” online: <https://www.cafa.world/arbitration/arbitrators/> ↑
Court of Arbitration for Art, “Experts” <https://www.cafa.world/arbitration/pool_of_experts/?show=all>. ↑
Ibid. ↑
Judith Prowda, “The Art of Art Authentication and a Global Alternative to Dispute Resolution” in NYSBA New York Dispute Resolution Lawyer, (2020) 13:1 at 15 online: <https://nysba.org/app/uploads/2020/04/
DisputeResolutionLawyer-Spring2020_Interactive.pdf>. ↑
Ibid. ↑
Caroline Renold, Alessandro Chechi, Anne Laure Bandle, Marc-André Renold, “Case: 6 Klimt Paintings – Maria Altmann and Austria,” Platform ArThemis, (Art-Law Centre, University of Geneva) online: <https://plone.unige.ch/art-adr/cases-affaires/6-klimt-paintings-2013-maria-altmann-and-austria> [Altmann Arbitration]. ↑
The Republic of Austria v Maria Altmann (03-13) 541 U.S. 677 (2004) 327 F.3d 1246. ↑
Altmann Arbitration, supra note 17. ↑
Bolz, supra note 1 at 11. ↑
Tom Seymour, “Secret talks between British Museum and Greece to return Parthenon Marbles in ‘advanced stages’”, (December 5 2022) online: The Art Newspaper <https://www.theartnewspaper.com
/2022/12/05/after-spending-200-years-in-the-british-museum-the-elgin-marbles-may-be-about-to-return-to-greece>. ↑
Ibid. Kyriakos Mitsotakis made these comments during a speech at the London School of Economics on November 28, 2022. ↑
Ibid. ↑

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advice. For legal advice, readers should seek a consultation with an attorney.