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Get Back: Arbitration Award Threatens Art Loans

What does a blood plasma business have to do with art law? Well, after a 2008 Czech arbitration court ruling on the verge of enforcement against the Czech Republic for $500 million in compensation for thwarting trading perspectives of Diag Human, a firm dealing in blood plasma, the Czech Republic is rushing to recall its valuable works of art on loan in fear that the property may be seized (again). Diag Human claims that rumors in 1992 that the company was suspected of illegal activities resulted in the company not getting a government contract. The issue of whether the Czech government slandered the business owner was submitted to arbitrators, and now Czech cultural heritage may become a collateral to force the government to pay up.

Human’s lawyers are seeking recognition of the award in several EU countries and the U.S. by means of seizing the country’s assets. Courts in Vienna and Paris recognized the company’s claim in May.  In an effort to enforce the award, two paintings, estimated value $877,000, were seized from Vienna’s Belvedere Gallery. Following the Austrian move, the Czechs withdrew paintings from exhibitions in France and other EU countries, including a Manet painting from the Musee D’Orsay in Paris.
Diag Human admitted that its claim is “80 times higher” than it was originally because the Czech state did not respect court and arbitration decisions and should pay interests because of the protracted dispute.

According to some officials, these events could affect loans policy for many years. For now, the Czech Culture Ministry said it would not allow any artwork worth more than 100,000 koruna ($6,055) to be loaned abroad.

Read more here and here.