The Bouvier Affair

The Bouvier Affair is the name that art commentators have given to a court battle that started in 2015.

Yves Bouvier

The cases centre around Yves Bouvier, a Swiss art shipper and dealer, as well as a pioneer of freeports, and Dmitry Rybolovlev, a Russian oligarch living in Monaco, former owner of Uralkali, as well as President of AS Monaco football club.

Background to the Bouvier Affair

Prior to 2015, Bouvier was primarily known in the market as an art transporter and curator through his company, Natural Le Coultre; and as a major shareholder and promoter of the Freeport concept.

After having first developed Natural Le Coultre and its links to the Geneva Freeport, Bouvier in 2010 inaugurated the first Singapore Freeport, a 30 000 m2 facility near the airport.^[1]

However, in 2012 he became embroiled in a legal case involving a Canadian collector called Lorette Shefner. Shefner’s family claim that she was the victim of a complex fraud, whereby she was persuaded to sell a Soutine painting at a price far below market value, only to see the work later sold to the National Gallery of Art in Washington DC for a much higher price.^[2][3]

Separately, de la Béraudière was implicated in the notorious case of Wolfgang Beltracchi, a German forger who was convicted in 2011 of having defrauded a number of collectors, including Daniel Filipacchi, of millions of dollars.^[4]

Bouvier’s purported connections to Galerie Jacques de la Béraudière and his ownership of an off-shore entity called Diva Fine Arts led to Bouvier also being connected to the Beltracchi case. He has, however, always denied any connection to Beltracchi and dismissed media coverage as uninformed speculation.^[5]

Dmitry Rybolovlev

In 1992 Rybolovlev, in the context of very tough and criminal competition, became the first businessman in the Perm region to obtain a Russian Ministry of Finance certificate entitling him to deal with securities, and in the same year opened an investment company. In 1994 Rybolovlev founded a bank, acquired shareholdings in several of Perm’s industrial enterprises and joined their boards.^[6]

In 1995, Rybolovlev sold most of his shareholdings and focused in enterprises operating in the potash industry, in particular, Uralkali.

According to Forbes, in May 1996 Rybolovlev initiated the adoption by a meeting of Uralkali shareholders of a resolution regarding the replacement of a trader because of discriminatory sales conditions. The following day Rybolovlev was arrested on a charge of having ordered a contract killing. At the age of 29, he was to remain for the next eleven months in a Perm prison cell.^[7]

Rybolovlev sold his major stake in Uralkali in 2010, notably after Berezniki ecological disaster in 2006.^[8][9] After his divorce known as the most expensive break-up in human history,^[10] Dmitry Rybolovlev moved to Monaco in 2011 and bought the AS Monaco football club. Dmitry Rybolovlev is known for having constituted one of the most spectacular art collections of modern times with the help of Yves Bouvier since 2003.^[11] Rybolovlev's art collection includes paintings by Paul Gauguin, Auguste Rodin, Amedeo Modigliani (Nude on a Blue Cushion), Pablo Picasso, Henri Matisse, and Mark Rothko (No. 6).^[12] His version of Salvator Mundi may be the only painting by Leonardo da Vinci remaining in private hands.

In April 2016, it was revealed by the International Consortium of Investigative Journalists (ICIJ)^[13] that Rybolovlev used a company registered in the Virgin Islands to hide art from his former wife Elena during their divorce proceeding.^[14] Rybolovlev's use of offshore companies was deemed a "textbook example of the lengths rich people (in most cases men) go to protect their considerable wealth in case of a marital breakup" by the Süddeutsche Zeitung.^[15]

Case

Despite the ongoing Shefner case, and the links made by the media between Bouvier and the Beltracchi case, Bouvier remained relatively low profile outside of the specialised art world until 2015. In that year, however, two major cases thrust the Bouvier Affair firmly into the spotlight.

One of these involves Catherine Hutin-Blay, the step-daughter of Pablo Picasso. In March 2015, Hutin-Blay, the only daughter of Picasso’s second wife Jacqueline, filed a complaint alleging that 58 separate works had been stolen from her. Hutin-Blay alleged that the works were stolen from a store in a suburb of Paris that is run by Art Transit, a Bouvier family company.^[16][17]

However, Dmitry Rybolovlev later announced that Bouvier had sold him the two Picasso paintings in 2013.

Rybolovlev handed over the paintings to French authorities in 2015.^[18]

Bouvier denied any involvement in the thefts. In September 2015, Bouvier was formally indicted by the French authorities on charges of theft in relation to the discovery of two of the works by Picasso that Hutin-Blay alleged were stolen from her.^[19] However, Yves Bouvier demonstrated she received the amount of 8 million euros through a Liechtensteiner trust for their sales.^[20] All doubts against Yves Bouvier have been ruled out since and the prosecution of Liechtenstein has closed the case on 1 December 2015.^[21]

The Hutin Blay case coincided with a separate case involving allegations made by Rybolovlev forming the major part of the affair. In February 2015, Bouvier was indicted in Monaco on charges of fraud and complicity in money laundering. The charges followed a criminal complaint made by Rybolovlev’s family trust alleging that Bouvier had systematically overcharged it over a period of 10 years to acquire paintings.^[1][22][23]

On 26 February 2015, the Swiss merchant was arrested in Monaco upon an accusation by Dmitry Rybolovlev.^[24] The Russian billionaire accuses Yves Bouvier of defrauding him on several hundred millions of dollars over the sale of 37 paintings since 2003. Yves Bouvier has always denied all accusations, arguing he first heard about the complaint when he was arrested.^[25] Indeed, the price and the terms of each sale had always been carefully agreed by both parties.^[25] Rybolovlev charged Yves Bouvier for fraud and money laundering in Monaco. An ambush was organized to arrest him: Rybolovlev invited the Swiss businessman to Monaco to discuss pending payment of a Rothko painting.^[26] Eight policemen arrested Yves Bouvier just before he entered Rybolovlev's property.^[25][26]

Many irregularities have been identified in Dmitry Rybolovlev's complaint in Monaco against Yves Bouvier. Among others, Yves Bouvier was arrested on 26 February 2015 thanks to a forged document issued by HSBC bank Monaco. HSBC has been since then accused of forgery and falsification of records.^[27] The procedure is pending. Rybolovlev might have organized the arrest of Yves Bouvier with the help of Philippe Narmino, Minister of Justice, and Jean-Pierre Dreno, Prosecutor of Monaco. In particular, French newspapers Mediapart and Libération revealed that during a dinner in Gstaad, Dmitry Rybolovlev, Philippe Narmino and Gérard Cohen, from HSBC bank in Monaco, may have discussed the details of the plot, only a few weeks before Bouvier was arrested.^[28][29]

Bouvier and co-defendant Tania Rappo, who is accused of money laundering in the fraud, attempted to have charges against them thrown out in November 2015. They argued that there were a number of irregularities in the legal procedure against them and that Rybolovlev, as a prominent citizen in Monaco, may have exercised undue influence.^[30]

However, the judge rejected their argument and both are due to face trial in Monaco in 2016. Bouvier also faces a trial in the Hutin-Blay case in France later in 2016.^[31]

In late 2015, it also emerged that Bouvier has been investigated by the authorities in Liechtenstein on suspicion of money laundering, in one instance related to a forged Max Ernst work, that is alleged to have been created by Wolfgang Beltracchi. However, Liechtenstein suspended its investigation in December 2015.^[32]

Impact of the Bouvier Affair

The Bouvier Affair has been widely reported and followed across the art world and beyond as one of the biggest art stories of 2015. Many art commentators believe that the Affair could be the catalyst for a renewed push to reform the art market.^[33]

Role of Sotheby's

In November 2016, Sotheby's issued a pre-emptive suit in relation to the Salvator Mundi painting, denying that it had ever been part of a scheme allegedly perpetrated by Bouvier to defraud both the sellers of the painting, and Rybolovlev.^[34] The New York Times subsequently published a major investigative report into the sale, asking whether the sellers of the Salvator Mundi "were misled [by Sotheby's] to favor the Swiss dealer, a valued Sotheby’s client named Yves Bouvier."^[35]

Singapore Case

On 13 March 2015, Singapore's High Court ordered the global freezing of Yves Bouvier’s assets,^[36] and then lifted this decision 12 days later, ordering Dmitry Rybolovlev to give a total of $100m guarantee of damages from his action against Bouvier, $20m in cash and an $80m guarantee on the Rothko No. 6 painting.^[37] On 21 August 2015, Singapore's High Court completely removed the freezing injunction, on the ground that the procedure launched by Dmitry Rybolovlev amounted to an abuse of procedure.^[37] In March 2016 there was a major development in the global legal action against Bouvier when the High Court of Singapore dismissed his attempt to suspend the civil suit filed in the territory against him by two companies linked to the Rybolovlev family trust. Bouvier had argued the dispute should be fought in the Swiss courts.^[38]

In a judgment published on 22 March 2016, Senior Judge Lai Siu Chiu ruled that the Singapore suit, which was filed in the High Court in 2015, should proceed. She said the case should be transferred to the Singapore International Commercial Court, which deals specifically with cross-border commercial disputes.

References