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preponderance of the evidence submitted to it supported a finding that the work at issue was genuine. Even if we considered declaratory relief to be proper in this context, such a limited determination would, in any event, be of no value.49

Conscious of Greenberg Gallery, the court noted that a court’s declaration on ‘authenticity would not resolve plaintiff’s situation, because his inability to sell the sets is a function of the marketplace. . . . ​If it is immaterial to the art world that plaintiff has proof that the sets were built to Calder’s specifications, and that Calder approved of their construction, then it will be immaterial to the art world that a court has pronounced the work “authentic”’.50

Despite the Thome court’s more cautious nature, the result again highlights the limitations of the traditional justice system and its inability to provide meaningful relief in art disputes.

III CAFA ESTABLISHED TO ADDRESS LIMITATIONS OF COURTS

The US judicial system has a history of overcoming similar problems of expertise and legitimacy, with the establishment of certain specialty courts.51 For example, the United States Bankruptcy Court, established in 1978, has jurisdiction over all cases arising under the United States Bankruptcy Code;52 the Delaware Court of Chancery, established in 1792, was established to adjudicate disputes arising out of complex business transactions;53 and similar specialist venues are emerging to address patent and trademark disputes.54 However, the US legal system has not developed a specialist mechanism for addressing art disputes.

In light of the absence of a system dedicated to art disputes, and in light of the often international nature of art transactions, the AiA began formulating a tribunal to do so. In 2014, the AiA announced the formation the Authentication in Art Alternative Dispute Resolution Board (AiA ADR) for the purpose of resolving authenticity disputes outside the traditional court settings.55

In 2018, the focus of the AiA ADR was expanded to include all art disputes, in what became known as the CAfA.56 The AiA and NAI formed a working group to develop the rules of procedure for CAfA.57

49Thome, 70 A.D.3d at 100 to 101.

50id., at 103.

51Justin Sevier, ‘Redesigning the Science Court’, 73 Md. L. Rev. 770, 786 to 787 (2014) (discussing Andrew W Jurs, ‘Science Court: Past Proposals, Current Considerations, and a Suggested Structure’, 15 Va. J.L. & Tech. 1, 24 (2010)).

52id., at 786 to 787 (discussing Jurs at 26).

53id. (discussing Jurs at 24 to 25; Anne Tucker Nees, ‘Making a Case for Business Courts: A Survey of and Proposed Framework to Evaluate Business Courts’, 24 Ga. St. U. L. Rev. 477, 480 to 482 (2007)).

54Sevier (footnote 51, above), at 786 to 787 (discussing Matthew G Jacobs and Michael S Mireles, ‘The Intersection of Intellectual Property and Antitrust Law: In re Independent Service Organizations Antitrust Litigation’, 15 Transnat’l Law. 293, 297 (2002); Nancy Olson, ‘Does Practice Make Perfect?

An Examination of Congress’s Proposed District Court Patent Pilot Program’, 55 UCLA L. Rev. 745, 747 to 749 (2008)).

55CAfA: A Brief History, available at https://authenticationinart.org/cafa/.

56id.

57AiA [Authentication in Art] Work Group Art & Law, available at https://authenticationinart.org/ congress-2018/workgroup-art-law/. The working group comprised art law experts from around the world, including: William Charron (who chaired the group), lawyer at Pryor Cashman in New York

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The CAfA procedures were designed to address two primary issues in the administration of justice relating to art disputes: decisional accuracy (i.e., the ability to correctly apply the appropriate law to the facts of a dispute) and procedural legitimacy (i.e., the ability of a decision-making system to provide citizens with a sense of voice and fairness in the proceedings).58

i Decisional accuracy

The process of making accurate decisions requires that a fact-finder (1) makes correct determinations about the facts, including which facts are the most relevant to resolving the dispute, and which are credible; (2) identifies the correct law that governs the dispute; and

(3) correctly applies the law to the facts of the case to reach an appropriate verdict.59 An error at any of these stages diminishes the factfinder’s ability to make an accurate decision.60

CAfA was designed to ‘“flatten the learning curve” in [art disputes] by having experienced art lawyers be the deciders. Practitioners should be better equipped to understand and more properly weigh the evidence in a manner that the market will accept’.61

ii Legitimacy

Procedural legitimacy refers to the willingness of a litigant (and the market generally) to abide by a decision maker’s judgment independent of the outcome of the dispute.62 Several procedural factors influence people’s perceptions of the legitimacy of a decision-making body:63 the decision maker’s neutrality (that is, that the decision is based on rules and facts instead of the decision maker’s intuition),64 the degree of respect and dignity that the decision maker confers on the parties,65 the amount of voice and control that the parties have over the legal dispute,66 and the degree to which parties can trust the decision maker’s motive to be fair.67

Processes that are more adversarial in nature – for example, in jury trials, the use of cross-examination of witnesses and greater control over the flow of information to the

City; Dr Friederike Gräfin von Brühl of K&L Gates LLP, Berlin; Shawn Conway, managing partner of the international arbitration law firm Conway & Partner; Luke Nikas, co-chair of the art litigation and disputes practice of Quinn Emanuel Urquhart & Sullivan, LLP, in New York City; Megan Noh of

Cahill Cossu Noh & Robinson; Judith Prowda, a senior faculty member of Sotheby’s Institute of Art and founding member of Stropheus Art Law; and Nicole Wallace, a barrister in the United Kingdom and founder of Art ADR Global.

58Sevier (footnote 51, above), at 776.

59id., at 796 (discussing John R Allison, ‘A Process Value Analysis of Decision-Maker Bias: The Case of Economic Conflicts of Interest’, 32 Am. Bus. L.J. 481, 492 (1995) (defining decisional accuracy as ‘when the decision maker’s inferences are as close as possible to actual events’).

60Sevier (footnote 51, above), at 796 (discussing Allison, 32 Am. Bus. L.J. at 492).

61Pryor Cashman, ‘First-of-Its-Kind Global Arbitration Court for Art Disputes Launching June 2018’

(7 May 2018), available at www.prnewswire.com/news-releases/first-of-its-kind-global-arbitration-court- for-art-disputes-launching-june-2018-300643034.html.

62Sevier (footnote 51, above), at 774 to 775 (discussing David Marcus, ‘From “Cases” to “Litigation” to “Contract”: A Comment on Stability in Civil Procedure’, 56 St. Louis U. L.J. 1231, 1231 (2012))

63id. (discussing Tom R Tyler, ‘Social Justice: Outcome and Procedure’, 35 Int’l J. Psychol. 117, 121 (2000)).

64id., at 800 to 801 (discussing Tyler, 35 Int’l J. Psychol. at 122).

65id.

66id. (discussing Tyler, 35 Int’l J. Psychol. at 121 to 122).

67id. (discussing Tyler, 35 Int’l J. Psychol. at 122).

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factfinder – are considered to be more procedurally legitimate than accurate.68 On the other hand, procedures that are more inquisitorial in nature – such as bench trials, court-appointed expert witnesses, and an increased role for the factfinder – are considered more accurate than procedurally legitimate.69

Achieving legitimacy requires balancing the adversarial process with the inquisitive process towards an end goal of accuracy and fairness.70 The rules of CAfA were drafted to specifically balance these considerations. As the CAfA working group explained: ‘Everything we analyzed came back to the questions of whether this is something the market will likely accept, and whether this is something that best positions the tribunal to render the right results.’71

IV CAFA’S STRUCTURE AND PROCEDURE

CAfA’s working group focused on creating a structure that implemented these dual aims, with the efficiencies often found only in arbitration:

the court’s arbitrations will function like traditional alternative dispute resolution: while the parties are free to customize their rules to a large extent, the default rules provide for . . . more​ limited discovery than you would have in court, and with international enforcement through treaties such as the New York Convention . . . the​ hearings can be conducted anywhere in the world, based upon party and arbitrator agreement.72

The default rules provide for the following.

i The arbitration panel

CAfA’s rules provide that an arbitration panel composed of either one or three arbitrators73 is appointed from a pool of international lawyers with expertise in art law.74 The pool of potential arbitrators is composed of:

highly qualified international arbitration professionals coupled with a pool of leading experts in the fields of forensic science and provenance research regarding art objects qualified to resolve disputes in the wider art community, including matters involving international collectors, art historians, art market professionals, financial institutions, and other stakeholders in the international art market.75

68id., at 816.

69id.

70Justin Sevier, ‘The Truth-Justice Tradeoff’, 20 Psychol. Pub. Pol’y & L. 212 (2014).

71Cashman (footnote 61, above).

72Mike Fox, ‘Alumnus Spearheads New Art Arbitration Court’, University of Virginia School of Law

(23 July 2018), available at www.law.virginia.edu/news/201807/alumnus-spearheads-new-art-arbitration- court (last accessed 10 November 2020).

73CAfA Arbitration Rules, Article 12.2, in force as of 1 January 2019, available at www.cafa.world/docs/ CAfA%20Arbitration%20Rules.1.pdf.

74id., at Article 11.6, and Explanatory Notes AiA/NAI [Netherlands Arbitration Institute] Adjunct Arbitration Rules, 1.4, 2.1.

75Explanatory Notes AiA/NAI Adjunct Arbitration Rules, 1.4.

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The high calibre of the pool should add credibility to CAfA’s decisions and provide comfort to parties that their dispute will be resolved by a panel with the specific expertise required in art disputes, which is not always found in the court system.76

ii Experts

The tribunal also employs various experts for particular circumstances where specific knowledge is required.77 These experts are sourced from a pool of art historians, materials analysts, forensic scientists and provenance researchers; scholars of a particular artist may also be retained if needed.78 The parties are able to appoint experts on other issues, but any such evidence must not compete with or supplement the tribunal-appointed expert’s evidence on forensic science or provenance.79 The purpose is ‘to give the most comfort possible to the market that authenticity decisions are based on truly neutral expert analysis’.80

As with the pool of arbitrators, the parties’ confidence in the process and whether decisions rendered under these rules will command the respect of the art market will depend on the quality and independence of the experts in the pool.81

iii Technical process adviser

If a case involves highly technical issues, for example in relation to an object’s authenticity, with the parties’ consent, the tribunal may appoint a technical process adviser from an expert pool to liaise between experts and the panel, and to facilitate the gathering and exchange of evidence.82 The technical process adviser will act under the tribunal’s direction but, if requested, may draft proposed procedural orders for adoption by the tribunal.83 The assistance from the technical process adviser ensures that the panel is fully informed on and understands the issues of the case, bringing additional trust and legitimacy to the process.

iv Panel decisions

Another important aspect of CAfA’s rules is that the final arbitration decisions will be published and will identify the art at issue, while the proceedings themselves will be confidential and will protect the parties’ anonymity.84 Publishing the result ‘was deemed essential [by the working group] to ensure market understanding and acceptance of the results’.85

76Jane Parsons, Claire Morel de Westgaver, ‘A New Arbitral Institution for the Art World: The Court of Arbitration for Art’ (17 June 2018), available at http://arbitrationblog.kluwerarbitration.com/2018/06/17/ a-new-arbitral-institution-for-the-art-world-the-court-of-arbitration-for-art/.

77Marilyn Hayden, Dr Sharon Hecker, ‘Cheers: A New Court for Resolving Art Disputes’, Center for Art Law (29 March 2019), available at https://itsartlaw.org/2019/03/29/cheers-a-new-court-for-resolving-art- disputes/.

78CAfA, Arbitration Rules, (footnote 73, above), at Article 29.1; Explanatory Notes AiA/NAI Adjunct Arbitration Rules, 2.2.

79id., at Article 28.7.

80Cashman (footnote 61, above).

81Parsons, Morel de Westgaver (footnote 76, above).

82CAfA, Arbitration Rules (footnote 73, above), at Article 29.1, 29.7 to 29.9; Explanatory Notes AiA/NAI Adjunct Arbitration Rules, 8.

83id.

84id., at Article 51.

85Cashman (footnote 61, above).

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V UPDATE ON CAFA SINCE LAUNCH

CAfA officially began accepting cases on 1 April 2019.86 Currently, members of the art market are being encouraged to include CAfA’s model arbitration clause in all art-related contracts.87 Parties can either agree to CAfA jurisdiction over their dispute through a contractual clause in advance, or they can refer an existing dispute to CAfA through a submission agreement.88

86Laura Gilbert, ‘The Hague’s art arbitration court to open in April’, The Art Newspaper (21 March 2019), available at https://authenticationinart.org/pdf/artmarket/cafa-opens-april.pdf.

87Constanza Trofaier, Young ICCA Skills Training Workshop on Art Law and International Arbitration, London, 20 September 2019, available at www.arbitration-icca.org/YoungICCA/EventPages/2019- youngicca-events/Youngicca_london20sep_2019.html.

88Parsons, Morel de Westgaver (footnote 76, above).

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Part II

JURISDICTIONS

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Chapter 8

AUSTRALIA

Janine Lapworth1

I INTRODUCTION

Australia’s visual arts market is relatively small, with annual auction sales over the past 10 years averaging around A$108 million.2 Indigenous art is an important sector, accounting for on average around 8 per cent of annual auction sales,3 and with numerous active art centres in regional and remote areas.

The coronavirus pandemic has had a negative impact on the Australian art market in 2020.

A number of recent developments relate to Indigenous art, including nationally recognised protocols, action against inauthentic Indigenous art, and preservation of cultural heritage.

II THE YEAR IN REVIEW

The Australian art market has been negatively impacted by the coronavirus pandemic. Auction sales to the end of October totalled around A$61 million,4 tracking well below annual averages, despite strong online sales.5 Although Indigenous art sales have remained strong at auction houses, with sales to October of A$11 million,6 this has not been reflected at a local level, where travel restrictions have caused sales at Indigenous art centres to drop by approximately half.7

1Janine Lapworth is a senior consultant at Simpsons Solicitors. The author extends thanks to Adam Moxon Simpson, director, and Shane Simpson and Ian McDonald, special counsel, at Simpsons Solicitors for their review and suggestions.

2Average calculated from figures provided at www.aasd.com.au/index.cfm/annual-auction-totals/, accessed 3 November 2020.

3Average calculated from figures provided at www.aasd.com.au/index.cfm/annual-auction-totals/, accessed 4 November 2020.

4See www.aasd.com.au/index.cfm/artist-nationality-totals/, accessed 3 November 2020.

5Sutton, Malcolm, ‘Art auctions rebound through online sales but blue-chip investments remain stymied by “draconian” legislation’, 22 October 2020, at www.abc.net.au/news/2020-10-23/art-auctions-booming- but-sales-of-blue-chip-works-stymied/12801836, accessed 4 November 2020.

6See www.aasd.com.au/index.cfm/artist-nationality-totals/, accessed 3 November 2020.

7Morris, L, ‘After years of growth, Indigenous art sales have been hit hard by COVID-19’,

2 September 2020, at www.smh.com.au/culture/art-and-design/after-years-of-growth-indigenous-art-sales- have-been-hit-hard-by-covid-19-20200820-p55nma.html, accessed 4 November 2020.

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The pandemic has also resulted in the postponement of numerous exhibitions and even the delay of major acquisitions: the National Gallery of Australia’s A$6.8 million acquisition of Jordan Wolfson’s animatronic sculpture Cube has been hampered by international travel bans, with the artist and his team unable to travel to Canberra to install and test the work.8 Many practising artists were not eligible for pandemic-specific government assistance

packages and the industry is likely to take some years to recover.

There have been a number of developments in relation to Indigenous art over the past 12 to 24 months. The federal government’s arts funding body, the Australia Council, released a new edition of Protocols for using First Nations Cultural and Intellectual Property in the Arts. The Australian Museums and Galleries Association released First Peoples: A Roadmap for Enhancing Indigenous Engagement in Museums and Galleries.

There has been ongoing controversy over the licensing arrangements applicable to the Aboriginal flag, resulting in an inquiry by a Senate Select Committee of the Federal Parliament. The Select Committee on the Aboriginal Flag released its report in October 2020, recommending that the copyright in the artistic work constituting the Aboriginal flag not be compulsorily acquired by the federal government but that negotiations continue with the copyright owner and the licensees over the creation of a body with custodial oversight of the flag.9

Also in the Federal Parliament, the Senate Environment and Communications Legislation Committee recommended in April 2020 that a bill designed to protect against the trade in fake Indigenous art should not be passed by the Senate.10 Fraud remains an issue in this field.

In addition, the laws and processes permitting the damage or destruction of Aboriginal cultural heritage by mining and constructions companies are coming under increased scrutiny, following Rio Tinto’s destruction in May 2020 of Aboriginal rock shelters in Junken Gorge that date back 46,000 years.11 In a signal of changing values, public outcry and shareholder action resulted in the resignation of senior executives.

Women’s representation in gallery collections is receiving attention through initiatives such as the National Gallery of Australia’s national ‘Know My Name’ campaign during the 2020–2021 period.12

Climate change was also on the agenda over late 2019 and 2020, with bushfires threatening the estate of the late Arthur Boyd at Bundanon and the National Gallery of

8Kembrey, Melanie, ‘Controversial $6.8 million art acquisition delayed due to coronavirus’, 24 April 2020, at www.smh.com.au/culture/art-and-design/controversial-6-8-million-art-acquisition-delayed-due-to- coronavirus-20200422-p54m0k.html, accessed 5 November 2020.

9The Senate, Select Committee on the Aboriginal Flag, October 2020. Accessible at www.aph.gov. au/Parliamentary_Business/Committees/Senate/Aboriginal_Flag/AboriginalFlag/Report, accessed 4 November 2020.

10The Senate, Environment and Communications Legislation Committee, Competition and Consumer Amendment (Prevention of Exploitation of Indigenous Cultural Expressions) Bill 2019. Accessible at www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/ IndigCulturalExpression/Report, accessed 4 November 2020.

11Hepburn, Samantha, ‘Rio Tinto just blasted away an ancient Aboriginal site. Here’s why that was allowed’, 27 May 2020, at https://theconversation.com/rio-tinto-just-blasted-away-an-ancient-aboriginal-site-heres- why-that-was-allowed-139466, accessed 4 November 2020.

12See https://nga.gov.au/knowmyname/, accessed 6 November 2020.

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Australia having to close because of smoke. Climate change is also affecting policy, accelerating trends in museum and gallery de-accessioning programmes because of the environmental costs of storage.

IIIART DISPUTES

iTitle in art

In Australia, there is no special process to be followed to transfer title in artwork. As with any other personal property, it is necessary to show that the parties involved in the transaction (vendor and purchaser in respect of a sale or donor and recipient in respect of a gift) clearly intended that title should pass and to what extent. Ideally this would be evidenced in writing to minimise the risk of a subsequent dispute. There is no difference if the acquisition is by auction or by private sale. Like many other jurisdictions, the copyright and physical ownership are considered separately – one does not necessarily pass with the other.

As a matter of law, the purchaser does not have a duty of inquiry into title. Rather, under the Australian Consumer Law, the vendor must guarantee clear title, unless the contract of sale or the surrounding circumstances indicate that limited title was intended to be transferred.13 For further discussion of the application of the Australian Consumer Law consumer guarantees to artwork, see Section V.

Provenance practices in Australia continue to evolve in response to the Subhash Kapoor controversy. In 2008, the National Gallery of Australia acquired the Dancing Shiva statue from Kapoor. The provenance of the statue was called into question in 2014. The National Gallery of Australia sued Kapoor in the New York Supreme Court, one of the few galleries to take legal action in these circumstances. The Court issued a default judgment against Kapoor, ordering compensation of US$8.59 million.14 The Australian gallery sector has since spent considerable time reviewing provenance policies and practices, while Kapoor faces multiple criminal proceedings in India and the United States.

ii Nazi-looted art and cultural property

There is no legislation in Australia specifically dealing with art misappropriated during the Nazi era, nor is there an independent body to review and assess claims of Nazi misappropriation. However, various museums and galleries have reviewed their collections for items with questionable provenance during the period from 1933 to 1945 and have made their research information publicly available online.15

13Competition and Consumer Act 2010 (Cth), Schedule 2 – Australian Consumer Law, Section 51.

14Barker, Anne, ‘Dancing Shiva: National Gallery of Australia should get $11m compensation for stolen statue, court rules.’ Accessible at www.abc.net.au/news/2016-09-26/nga-granted-11m-compensation-for- stolen-dancing-shiva/7878740, accessed 6 November 2020.

15See, for example, https://nga.gov.au/collections/europeamerica/gallery.cfm?displaygal=prov; www.ngv.vic.gov. au/explore/collection/provenance; and www.qagoma.qld.gov.au/learn/research/provenance, each accessed 3 November 2020.

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The first Australian restitution of Nazi-appropriated art of which we are aware dates back to 2014, when the National Gallery of Victoria accepted that a portrait, originally attributed to Van Gogh, belonged to heirs of Richard Semmel, a Jewish industrialist who was forced by the Nazis to sell the portrait in Amsterdam in 1933.16

Ten years earlier, the same gallery had received a demand to return a Gerard ter Borch painting, Lady with a Fan, which had belonged to Max Emden, a Jewish retailer who abandoned his art collection when fleeing Hamburg and later Switzerland.17 However, this painting remains in the National Gallery of Victoria’s collection.18

See Section V regarding the general regulation of cultural property.

iii Limitation periods

There are no limitation periods specific to claims for art misappropriated during the Nazi era. More generally, the applicable limitation period for an art claim would depend on the cause of action and the jurisdiction in which it is brought. For example, contract claims and claims involving ‘detinue’19 or ‘conversion’20 in New South Wales must be commenced within

six years of the date on which the cause of action accrues.21

The 2014 case of McBride v. Christie’s Australia Pty Limited 22 involved a purchaser suing the auction house Christie’s (among others) over the sale in 2000 of the painting Faun and Parrot, attributed to the Australian painter Albert Tucker. When the purchaser sought to sell the painting some 10 years later, it was discovered that the painting was a forgery. At the time of the auction, no one was aware that the painting was not genuine. However, soon after the auction, a group of eminent art experts raised doubts about the painting’s authenticity with the auction house and Christie’s did not contact the purchaser to advise her of this new information. Among other defences, Christie’s argued that as the purchaser had suffered loss immediately upon purchasing the painting in 2000, the plaintiff’s action had not been brought within the six-year limitation period. However, it was held that the purchaser had suffered the loss, not upon purchasing the artwork in 2000, but upon discovering that the artwork was a forgery in 2010. Accordingly, the applicable limitation period had not expired.

iv Alternative dispute resolution

Alternative dispute resolution remains popular in Australia and its private nature appeals to many involved in art disputes. Increasing delays in some Australian courts have meant arbitration, mediation and expert determination can offer swifter options.

16‘Portrait becomes Australia’s first Nazi art restitution’, dated 30 May 2014, at www.bbc.com/news/ entertainment-arts-27634262, accessed 3 November 2020.

17Blakeney, M ‘Restitution of Art Looted During the Nazi Era, 1933–1945: Implications for Australia’ [2016] UWALawRw 16; (2016) 41(1) University of Western Australia Law Review 251.

18See www.ngv.vic.gov.au/explore/collection/work/4404/, accessed 3 November 2020.

19The tort of detinue relates to the wrongful detention of property by a person, coupled with the person’s unreasonable refusal of the owner’s demand for the property to be returned.

20The tort of conversion is available where a person who does not have legal title over goods deals with them in a way inconsistent with the owner’s rights.

21Limitation Act 1969 (NSW), Sections 14(1)(a) and 14A.

22McBride v. Christie’s Australia Pty Limited [2014] NSWSC 1729.

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