Russian Billionaire Loses Appeal in Feud With Swiss Art Dealer

(Bloomberg) -- Yves Bouvier won a second victory in his feud with Russian billionaire client Dmitry Rybolovlev, after Monaco’s top court threw out charges of fraud and money laundering against the Swiss art dealer because the initial investigation had been “tainted.”

The Court of Revision on Wednesday rejected Rybolovlev’s appeal of a December ruling, ending the Russian billionaire’s legal pursuit of Bouvier in the tiny Mediterranean principality, where the dispute began in early 2015.

It was in January of that year that the Russian accused Bouvier of overcharging him by close to $1 billion for dozens of modern masterpieces by Pablo Picasso and other artists. Rybolovlev, who made his fortune from the sale of two fertilizer businesses in Russia, said Bouvier violated fiduciary duties as his broker by deceptively inflating the acquisition costs of the paintings.

The battle has been playing out over the past five years in courts across Europe as well as New York and Singapore. Bouvier and his lawyers have argued repeatedly that he was never Rybolovlev’s broker, that the 2% commissions he charged were not brokerage fees but were to cover administrative costs and due diligence, and that the Russian was just a repeat customer willing to pay top prices to secure the artworks.

Bouvier was quick to claim success on Wednesday, calling it “a total and definitive victory in Monaco.”

“For the last five years, I have been claiming my innocence, and today I have been vindicated by the Monaco courts,” he said in a statement from his lawyers.

Rybolovlev and his trust companies, which brought the motion, will have to pay the costs of the failed appeal.

Though Rybolovlev’s lawyers appealed the December decision, they said the Monaco decision carries less importance for the overall case against Bouvier and only means that the focus of the fight moves to Geneva, where the Swiss entrepreneur’s art logistics business was based.

Bouvier remains the subject of an investigation by Geneva cantonal prosecutors, based on a criminal complaint Rybolovlev filed in Switzerland in 2017. The Geneva Prosecutor’s Office didn’t return a message left Tuesday asking for an update on the case in the Swiss city.

“Yves Bouvier will have to answer to these facts, in a jurisdiction that is yet more important than the case pursued in Monaco,” Herve Temime and Thomas Giaccardi, Rybolovlev’s lawyers, said in a statement.

Bouvier also faces a tax investigation by Swiss tax authorities. He has previously said that is based on a misunderstanding as he’s long been a tax resident in Singapore, not Switzerland.

Rybolovlev too has a legal cloud hanging over him, as he faces charges of corruption and influence-peddling in Monaco. Text messages found on the phone of his lawyer revealed Rybolovlev had invited Monaco’s then justice minister Philippe Narmino to Rybolovlev’s chalet in the Swiss Alps. Other messages were found in which the lawyer discussed a trip by Bouvier to Monaco during which he was arrested.

The Court of Revision referred to those dealings without weighing in on the charges against the Russian. The relations between Monaco investigators and a lawyer who brought the complaint against Bouvier for Rybolovlev’s camp meant that the whole investigation was “tainted” by these shortcomings, Cecile Chatel-Petit, president of the court, said in the ruling.

“The investigation was conducted in a biased and unfair manner under conditions which seriously and durably compromised the balance between the parties,” the court said.

©2020 Bloomberg L.P.