A US$1 billion (S$1.4 billion) lawsuit brought in the Singapore courts by a Russian oligarch involving his collection of artwork by artists such as Leonardo Da Vinci and Pablo Picasso, has been stopped in its tracks.
The Court of Appeal ruled yesterday that the art deal dispute between fertiliser magnate Dmitry Rybolovlev and Swiss freeport king Yves Bouvier should be heard in Switzerland and not here.
The judgment overturned an earlier outcome in March last year in which the judge dismissed an application to stay the suit on the grounds that Singapore was not the appropriate forum. The judge went on to urge the parties to agree to transfer the case to the Singapore International Commercial Court.
Chief Justice Sundaresh Menon, in a written judgment on Tuesday, said: "In our view, the tenor, form and substance of the parties' dealings were intimately tied up with Switzerland and Swiss law.
"Indeed, we see no substantial connections between those dealings and any other jurisdiction, be it Singapore or otherwise."
Mr Bouvier, a Singapore permanent resident who moved here from Geneva in 2009, is credited with setting up freeports, facilities where artwork is stored in a tax-free setting, in Singapore and Luxembourg.
Mr Rybolovlev made headlines in 2014 after he was ordered to pay four billion Swiss francs (S$5.6 billion) to his ex-wife. The award was later slashed to 564 million francs.
For more than a decade after they were introduced in Geneva, Mr Bouvier played an instrumental role in amassing Mr Rybolovlev's art collection. The art deals were carried out between Accent Delight International and Xitrans Finance, controlled by Mr Rybolovlev, and Mr Bouvier's vehicle MEI Invest.
But the two men fell out in 2014 after Mr Bouvier claimed the Russian failed to make full payment for a €140 million (S$210 million) Mark Rothko painting, and Mr Rybolovlev accused the Swiss of inflating artwork prices and pocketing unauthorised profits.
A criminal complaint was filed in Monaco, while Accent and Xitrans filed a lawsuit in Singapore against Mr Bouvier and MEI Invest.
The plaintiffs alleged that as their agent, Mr Bouvier had breached his duties to them. Mr Bouvier said he was not an agent but an independent seller and the deals were on a "willing buyer-willing seller" basis.
Mr Bouvier, represented by Senior Counsel Edwin Tong, asked for the suit to be stayed, arguing that the case should be tried in Switzerland. The High Court ruled in favour of Mr Rybolovlev but Mr Bouvier won on appeal. The Court of Appeal noted that both men were in Switzerland when Mr Bouvier agreed to help Mr Rybolovlev procure artwork. The first four contracts also stated that Swiss law was to govern the agreements.
Senior Counsel Davinder Singh, representing Accent and Xitrans, argued that this had changed in 2009, when the works were shipped to Singapore.
But the court said these events - motivated by Mr Rybolovlev's desire to shield his assets from Russian authorities and his ex-wife - do not have legal significance with respect to his dealings with Mr Bouvier.
