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Young ICCA Skills Training Workshop on Art Law and International Arbitration, London, 20 September 2019

By Constanza Trofaier, Doctoral Candidate, University of Vienna

On 20 September 2019, Young ICCA held a Skills Training Workshop on Art Law and International Arbitration in London, UK. The workshop was kindly sponsored and hosted by Withers LLP. It was organized by a Steering Committee composed of Young ICCA Events Coordinator Ms Ana Coimbra Trigo, PLMJ Advogados (Lisbon), and Ms Giulia Trojano, Withers LLP (London), kindly guided by Young ICCA Co-Chair Ms Camilla Gambarini, Withers LLP (London). Around 40 young international arbitration practitioners and students attended the workshop.

At the beginning of the workshop Ms Gambarini welcomed the participants and gave an overview of Young ICCA and ICCA, explaining who they are and what their activities encompass.

The workshop was divided into two panels: The first panel provided an introduction to art law, focusing on issues of art restitution and cultural heritage law. The second panel discussed the possibilities international arbitration offers in art-related disputes. Both panels ended with vibrant Q&A sessions. The following summarizes the main issues addressed.

First Panel: Introduction to Art Law

Ms Patricia Dias Mendes, PLMJ Advogados (Lisbon), moderated the first panel. She introduced the speakers and their topics, discussing art law in general and the initiatives undertaken in this field by international organizations.

Ms Ghaliya Al-Lamki, UNESCO (Paris), introduced the United Nations Educational, Scientific and Cultural Organization (UNESCO) and its conventions on the protection of the world’s cultural and natural heritage. She highlighted UNESCO’s 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, requiring Member States to take actions for (i) preventive measures; (ii) return and restitution; and (iii) strengthening international cooperation.

In cases where no international convention applies, UNESCO Member States may call on the Intergovernmental Committee for Promoting the Return of Cultural Property to its Countries of Origin or its Restitution in case of Illicit Appropriation (ICPRCP). ICPRCP was established in 1978, however, so far, it has only dealt with six cases, where the Parthenon Sculptures case between Greece and the UK, and the Broken Hillman Skull case involving Zambia and the UK are still pending. In any event, the committee may only issue non-binding recommendations.

Ms Morgane Fouquet-Lapar, ICOM (Paris), presented the International Council of Museums (ICOM) and its mission. ICOM is a non-governmental organization of museums and museum professionals. It establishes professional standards, leads a diplomatic forum and promotes capacity-building. In order to curb the illicit trafficking of cultural objects, ICOM has developed Red Lists, identifying categories of objects at risk. Ms Fouquet-Lapar also discussed the forms of dispute resolution that ICOM generally relies on: (i) a formal mediation process under the ICOM-WIPO Mediation Rules; and (ii) an “informal mediation”, consisting of ICOM’s good offices, facilitation and expertise. The ICOM-WIPO mediation process was established in 2011 upon ICOM and WIPO signing a memorandum of understanding. This formal mediation service has a broad scope and is available to public and private parties. The mechanism will soon be reviewed to take into consideration the lessons learned and the challenges inherent to art and cultural heritage disputes. Relevant stakeholders may also refer to the informal mediation process which has shown to be successful..

Ms Sandrine Giroud, Lalive (Geneva), then took the floor to present the practitioner’s perspective on art law. She explained that art is increasingly becoming a financial investment. She highlighted that conflict of interest is a major problem in the art market, due to the lack of specific regulations. Unlike a trader who is prohibited from using non-public information to trade, as it is considered insider trading, an art dealer who is privy to and uses information that benefits a sale, is considered a good art dealer.

She pointed out key legal issues to consider in art-related transactions such as: (i) applicable law & jurisdiction (e.g. Common Law vs Civil Law); (ii) contracts (if any, generally handshake deals); (iii) appraisal (authenticity, condition, value); (iv) stolen/looted art; (v) cultural goods (import/export, sanctions); (vi) intellectual property; (vii) insurance; and (viii) customs & tax. Concluding, Ms Giroud referred to the Responsible Art Market (“RAM”) as an initiative aiming to raise awareness of risks faced by the art industry and provide practical guidance on establishing and implementing responsible practices to address those risks. RAM’s work includes Guidelines on combatting Money Laundering and Terrorist Financing as well as an Art Transaction Due Diligence Toolkit.

Second Panel: Art Law Disputes and International Arbitration

Ms Marion Paris, Lévy Kaufmann-Kohler (Geneva), moderated the second panel on the role of arbitration in art-related disputes and introduced the speakers.

Ms Eleni Polycarpou, Withers LLP (London), discussed the different types of art-related disputes, i.e. disputes relating to (i) title; (ii) authenticity and attribution; and (iii) the nature and term of relationship between the parties, for example, collectors vs dealers; or collectors acting as lenders. Ms Polycarpou presented case-examples relating to art, explaining why arbitration was or would have been the better option. In all cases, the issue of confidentiality played an important role, whether it was to prevent public scrutiny of the parties and their dealings or to avoid an art object’s value being diminished by public disclosure of its disputed authenticity. Ms Polycarpou emphasized as advantages of arbitration (i) confidentiality, (ii) the possibility to have experts sit as arbitrators, i.e. in authenticity/attribution or valuation disputes; (iii) creativity and flexibility; and (iv) international enforcement. From her experience the flexibility and confidentiality of arbitration are the prime advantages in art related cases.

Mr Stan Putter, Conway & Partners (Rotterdam) and the Court of Arbitration for Art (The Hague), gave an overview of the newly established Court of Arbitration for Art (CAfA). He emphasized that CAfA provides full confidentiality of the proceedings and, if parties object to the publication, arbitral awards are not published. Moreover, CAfA maintains an Arbitrator and Expert Pool for possible appointments, all to ensure art law expertise in the various phases of an arbitration. According to Mr Putter the most arbitrators in CAfA’s Arbitrator Pool will have an art law background, but for due process requirements several will have an arbitration background. The CAfA Arbitration Rules also offer the possibility, if the parties agree, of appointing a technical process advisor, as is usual in certain US proceedings. Furthermore, Mr Putter explained that the stipulation of The Hague as seat of arbitration in the CAfA Arbitration Rules is only a default provision, with CAfA arbitrations capable of being run with various seat and applicable law. Currently CAfA is negotiating with players in the art market to include CAfA’s model arbitration clause in their general terms & conditions.

Ms Francesca Mazza, German Arbitration Institute (DIS, Bonn), highlighted the DIS efforst in attracting art-related disputes, albeit based on their experience in sports arbitration. Both sports and art disputes, for example, (i) often have an emotional, and not purely commercial, aspect; (ii) involve a lot of money; (iii) require expertise; and (iv) benefit from a uniform approach. However, the main difference is that in sport disputes due to the sports federations’ monopoly and since States are involved, an arbitration clause is easily concluded in the relevant contract. DIS has a specific arbitration court for sport-related disputes, nevertheless, DIS decided against a specific court for art-related disputes. DIS considered that it would be more likely to succeed in the art market with its regular arbitration service, having administered numerous arbitrations. In particular, Ms Mazza pointed out that DIS may set up specific case committees, has very strict confidentiality provisions and places a strong emphasis on early conflict resolution, all favourable for art-related disputes.

In conclusion all speakers considered arbitration a viable option for art-related disputes. However, Ms Giroud explained that in certain cases public disclosure is therapeutic and, for example, cultural heritage disputes should be open to the public. Ms Polycarpou agreed, but suggested publishing the awards to satisfy the public interest issue, like in ICSID arbitrations.

In answer to Ms Paris’ question why there are so few art-related arbitrations, Ms Giroud clarified that in the art market deals are often not straightforward and in writing. Ms Polycarpou added that more needs to be done to increase awareness of arbitration as a possible dispute resolution mechanism in the art market.

The workshop was followed by a cocktail reception kindly sponsored by Withers LLP. This gave participants an opportunity for further exchanges with the speakers and other participants.


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