In June 2018, a new art arbitration court will open its doors to address and resolve exclusively art-related disputes. Named the “Court of Arbitration for Art”, its two main organizers are the Netherlands Arbitration Institute and the Authentication in Art Foundation. They will help to oversee mediation and arbitration services. It will be the first of its kind in the world.
The idea of a new art arbitration Court began in response to the difficulties in judicial-administered art cases, largely concerning evidence. By seating art experts as decision-makers, they will better understand and weigh technical issues.
Rules of the New Court
Effective as of 30 April 2018, the new Court of Arbitration for Art has enacted new Rules. Their primary objective is to provide market legitimacy and decision-based accuracy.
The Rules incorporate standard and up-to-date approaches to equip modern tribunals with administrative issues. English is the default language of proceedings, unless the parties agree otherwise. Further, due to the technical issues underlying many art disputes, parties appoint tribunal members from a selected Pool of experts. In compelling cases, an arbitrator may be chosen outside of the Pool. All arbitrators must have university legal training.
Tribunals shall range from three members to one, the latter of which occurs if the value of a dispute is less than EUR 500,000. A secretary may assist a tribunal at its request or on its own motion, subject to an administrative appointment.
If no choice-of-law clause is given, a tribunal may apply the law of the principal location of the seller (if known at the time of the transaction). If there is no sale, then the law of the owner of the object at issue will apply as of the date when proceedings commence.
The Rules (Point 8) state that the place of arbitration shall be The Hague. It is not entirely clear whether “place” means the “seat” (while allowing parties to conduct proceedings in any location) or rather a more mandatory provision. It would be misguided to require all parties to conduct hearings at The Hague, given the costs for travel and accommodation. However, considering that the Netherlands Arbitration Institute is supervising the new Court, it is probable that proceedings can occur internationally and be enforceable under the New York Convention.
Another interesting subject of the Rules relates to experts. For the most part, parties are free to hire their own experts. In authenticity cases, however, the tribunal will appoint its own forensic experts from a Pool (Point 12). The reason for this approach is probably due to cost-efficiency, given the high fees of such experts, and in order to ensure well-qualified experts.
Finally, while proceedings will be private and confidential, Point 15 authorizes publication of an award, including identifying the object at issue. However, there is no mention of including the parties’ identification. While at first unusual, this approach is an effective compromise. By making an award public, it will ensure that the market is aware of the results, which enhances legitimacy. At the same time, the Rules preserve party anonymity.
The establishment of a new art arbitration Court is the first of its kind. Considering arbitration’s advantages of flexibility, enforceability, and technical expertise, it will be interesting to see whether its marriage with art creates a masterpiece.