Sotheby’s and Russian-Cypriot billionaire Dmitry Rybolovlev have agreed to mediation to try to resolve the oligarch’s art fraud lawsuit against the auction house.
Rybolovlev accused Sotheby’s of helping his former art dealer, Switzerland’s Yves Bouvier, acquire 15 pieces of world-class art for which Rybolovlev paid more than $1 billion.
Bouvier charged hidden markups that caused Rybolovlev to overpay by hundreds of millions of dollars, the lawsuit alleged.
A letter that 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 U.S. District Judge Jesse Furman said Rybolovlev could pursue fraud-related claims over four works including “Salvator Mundi,” a depiction of Christ attributed to Leonardo da Vinci.
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. Rybolovlev sued through his companies Accent Delight International and Xitrans Finance.
In Monday’s letter, both sides said 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, Bouvier bought “Salvator Mundi” for $83 million in 2013 and quickly sold it to Rybolovlev for $127.5 million.
Rybolovlev went on to sell “Salvator Mundi” at Christie’s in 2017 for $450.3 million, a record price for a painting.
The case is Accent Delight International Ltd et al v Sotheby’s et al, U.S. District Court, Southern District of New York, No. 18-09011.