27 February 2013

Sheikh Shaken

The reports of the asset-freezing injunction obtained in London against a member of the Qatari royal family, Sheikh Saud Bin Mohammed Bin Ali Al-Thani, for failing to pay for ancient Greek coins, where he had been the successful bidder at a New York auction, has sparked a lot of interest.

The recession and the conduct of the international rich, particularly from China, has caused a serious rise in payment defaults after auctions.  So are asset-freezing orders the answer?

In England you can get such court orders to freeze all assets in England and, if justified the whole world, to support proceedings brought overseas or in England.  They are not granted automatically; the court needs to be satisfied that there is a severe risk of dissipation, that is that the assets might be moved or disposed of to frustrate enforcement of an eventual judgment.  The court can exercise its power over the defendant and third party asset holders, eg banks, that are within the jurisdiction, over assets they control anywhere in the world, and require disclosure of what assets they hold, or what became of assets previously held. 
It’s not cheap to get such an order, and it may require more than one hearing. £20,000 would not be untypical.  However, although a freezing order is procedurally just a first step in aid of substantive proceedings, the successful obtaining of such an order usually leads to early settlement.

26 February 2013

Back with two updates

I’m sorry it’s been a while since the last post.  My excuse is that I’ve been heavily tied up in a long trial.  My client is a well known Middle Eastern art collector, but the case was about investments other than art, so there’s nothing relevant to post.

Now I’m back, I can restart with two updates on previous posts.

My post Inspiration and Risk Management, on the fire risk of some installations, proved to be prophetic: one of my followers has pointed out this interesting report: Huffington Post.

There has been a happy outcome for the Henry Moore sculpture outside the Houses of Parliament, which was the subject of my post Res Nullius.   The Art Newspaper reports that ownership has now been “taken on by the House of Commons”.  I’m not sure how that can work as a matter of law, but let’s not challenge it.  The important thing is that this badly neglected sculpture is to be restored with money from the Parliamentary Art Collection and the Henry Moore Foundation.