Chapter 11: Alternative means of dispute resolution
Especially in sleeper disputes, ADR can assist the parties in the resolution of their issues in a more efficient and satisfactory way than court litigation. Many auction houses already practice resolving certain disputes amicably, including negotiation, mediation and arbitration. Auction houses refer to ADR as a direct consequence of the risks and implications developed in previous chapters, which potentially arise when a court judge has to assess the auctioneer’s negligence or an art object’s authenticity. However, very few auction houses contain a clause in their consignment agreement and conditions of sale that expressly refers to an ADR process. The advantages and suitability of ADR in sleeper disputes are discussed in Section 1 below. Then Section 2 presents the benefits of ADR that is formalized in the conditions of sale and outlines the dispute resolution process that auction houses should adopt. The preference for an amicable dispute settlement over court litigation is best shown by sleeper cases that were amicably terminated right before the commencement of court hearings. For example, the Onian heirs initiated court proceedings upon discovering that the painting Sotheby’s had catalogued as “The Sack of Carthage” by the Italian artist Pietro Testa (1611–1650) with an estimated value of £10,000–15,000 was, in fact, a work by the French master Nicolas Poussin (1594–1665). The consignor asked £4.5 million of Sotheby’s, but finally agreed to settle on the eve of the trial.
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