By Paul W.L. Russell, LL.M. In January 2014, the owner of an art collection sells it via a holding company for EUR 1,636,000 to All Art Initiatives B.V. (AAI) to pay off part of his debts to the group company to which AAI belongs. In January 2013, the collection was appraised at EUR 3,759,100 on behalf of the owner. AAI seems to have made a good buy with the collection including works by Piet Mondrian, Max Liebermann, Mary Cassatt, Henri Toulouse-Lautrec, August Macke, Jan Sluijters, George Hendrik Breitner, Isaac Israëls, Maximilien Luce, Edouard Vuillard, James Ensor and Constant Permeke.

Fake art

When in 2015 two experts commissioned by AAI examined the art collection they concluded that a large number of the artworks were fake. Thereafter, AAI required documentation regarding the authenticity of the artworks from the original owner, such as certificates of authenticity, purchase invoices and catalogues raisonnés. The original owner only produced taxation reports that said nothing about the authenticity of the artworks, which did not satisfy AAI.

Damage and warranty

AAI then asked the court to terminate or annul the purchase agreement, because of fraud or error, or to compensate the damage because of non-conformity. As the owner should have known this, not just the holding company – which held the practically worthless collection – but also he himself is liable for the claim. As error was excluded in the agreement as a reason for termination and there was no conclusive evidence for fraud, only compensation due to non-conformity is dealt with in the proceedings. The original owner argues that no warranty for authenticity was given and that AAI, as a professional buyer, should have performed an appraisal. The court does not go along with this. AAI could rely upon three appraisal reports the owner submitted to them prior to the purchase. In addition, the owner had guaranteed the value of the artworks.

Experts

As the opinions of the parties’ appraisers differ with regard to the value of the collection, the court decides to appoint its own expert. AAI claimed that the artworks were fakes and thus has to prove that this statement is correct. Therefore, it is not the task of the expert to determine that the artworks are authentic but to view whether it can be said with a great degree of certainty that the artworks are a fake. Due to this requirement the artworks will be considered as “authentic” more quickly.

Amount of damage

After an examination of 127 works of art, it turned out that one third was certain to be forged and the major part of the other works had been overvalued. The collection was not worth EUR 3,759,100, but only EUR 906,700. And that is a lot less than the amount of EUR 1,636,000 the collection was bought for. The seller, the holding company, therefore has to compensate the damage AAI incurred. That amounts to EUR 755,300, which is the difference between the purchase price and the actual value of the artworks. As the art collection was the major asset of the holding company, it will be difficult to obtain compensation. The Court does not consider it proved that the director of the holding company consciously harmed AAI and therefore only the holding company has to cover the damage and legal costs, and costs for seizure incurred.

Prevent fake art sales

The problems were caused because AAI had the collection thoroughly assessed after the purchase instead of before to it. This could be prevented by an upfront investigation regarding authenticity and provenance of artworks. About the author: Paul Russell is a lawyer for international and national businesses, art dealers, museums, and affluent individuals. He specializes in corporate governance, contracts and corporate litigation. He has been a lawyer at Russell since 1976. Russell Advocaten will gladly help you finding independent experts and drafting a sales agreement that provides you with the opportunity to recover the costs in the event of forgeries. @: paul.russell@russell.nl t: +31 20 301 55 55  

The most famous biologist in the Netherlands, Freek Vonk visited Rwanda last summer and his dream came true while discovering the country. Four TV episodes have been broadcasted in November; with his enthusiasm, Freek gave a wonderful impression about nature and wildlife in Rwanda. Herewith you can see the list of all four episodes, which will give you the opportunity to watch the episodes online. Episode 1 – broadcasted on 13 November Volcanoes NP – gorillas https://npo.nl/freeks-wilde-wereld/13-11-2017/VPWON_1283229   Episode 2 – broadcasted on 16 November Nyungwe Forest NP & Chimps https://npo.nl/freeks-wilde-wereld/16-11-2017/VPWON_1283232   Episode 3 – broadcasted on 24 November Colobus Monkey https://npo.nl/freeks-wilde-wereld/24-11-2017/VPWON_1283239   Episode 4 – broadcasted on 30 November Volcanoes – Bambooforest – Golden Monkey https://npo.nl/freeks-wilde-wereld/30-11-2017/VPWON_1283244    

On the picture Mr Endy Bayuni. “Democracy is both: the procedure and the content. It is a periodically revisited, fine-calibrated social contract that ties all horizontal and vertical segments of society. Although sometimes slow, tedious and consuming, this is still a truly comprehensive, just and sustainable way to build on its past, live the presence and pursuit the future of a nation.” Following the known lines of professor Anis H. Bajrektarevic on ties that bind, hereby is the fresh take from one of the largest democracies of the world – that of Republic of Indonesia. By Endy Bayuni. The late Soeharto has become something of a poster boy for leadership as the nation searches for a president who can effectively deliver the goods. Photos of the smiling president, who ruled Indonesia between 1966-1998, appear everywhere, with the caption in Javanese “piye kabare, isih penak jamanku, tho?” (How are you, better in my era, wasn’t it?), a reminder that for some, life was so much better then. The Soeharto posters and memes have been going viral since the 2014 election and are still circulating now. Soeharto was a dictator, there is no doubt about it, though his supporters would claim that he was a noble one. But the point of the poster is that Indonesia had a leader who delivered the goods, something that no other president since then has been able to match, so his supporters claim. Soeharto, who ruled with an iron fist, did deliver justice, security and welfare, but it is debatable whether his successors have fared better or worse. Ruling the country for 32 years, he was bound to have delivered something, while his successors have been subject to periodic democratic elections and limited to ruling for no more than two five-year terms. The bigger question, and this was one of the topics discussed at the recent Bali Civil Society and Media Forum, is whether democracy can deliver justice, security and welfare to the people, all the people. Indonesia, now a democracy for nearly 20 years, albeit a struggling one, makes a good case study to answer this question, by comparing the ability of the two political systems in bringing greater prosperity to the people. The track record of Indonesia since 1998 has not been bad, although perhaps underappreciated. The economy has improved significantly, in terms of overall GDP and per-capita-income growth, and the government today provides many services such as free health care, 12-year compulsory free education and cash assistance for the poor. Indonesia is today the 16th-largest economy in the world, and many predict that it will be in the top 10 by 2025 and top five by 2040. We have a growing middle class, reflected by the number cellphones, cars and motorcycles, and a growing appetite for holidays, both at home or abroad. And there is freedom, all kinds of freedom, something that distinguishes today’s era from that of Soeharto’s. Why then, do some people still feel that they miss Soeharto? Perhaps they don’t really miss him, but they miss the certainty, the swift way decisions were made and the security he provided. They miss the effectiveness and efficiency that an authoritarian regime can deliver. Democracy, unfortunately, is almost anything but. Decisions are made through an arduous and cumbersome process, and the government is often mired in stagnation. Every single major decision has to undergo the democratic processes, meaning noisy public debates and endless deliberation by legislators. We also have legislators who are good at grandstanding but ineffective in producing laws that reflect the aspirations of the people. In many ways, Soeharto’s regime produced some better laws because they did not go through the lengthy debates we see today. On security, Indonesia faces challenges in ensuring protection for people who are attacked or persecuted because of their faith, race, sexual orientation or even ideological leanings. The attacks on the Shia and Ahmadiyya followers, the forced closures of places of worship, the recent attacks against people because of their leftist ideological leanings, and the return of anti-Chinese sentiments, reflect that freedom and the protection of freedom have been denied to some. Soeharto would not have tolerated any of this, but then, he would not have tolerated a lot of other things, including dissent and differences of opinion. Populism, the hallmark of democracy and one way of getting elected, also means leaders addressing only popular issues but avoiding more fundamental problems. These failings of democracy in Indonesia may have revived our memory of the “good old days” of Soeharto (while forgetting the worse aspects of his regime), but they should not be used as a pretext for a return to authoritarianism. Democracy in Indonesia is still a work in progress. We have been in this game for only 20 years, and it still has not been able to ensure justice, security and welfare for all. Democracy, as the popular saying goes, is the worst form of government, except for all the others. The alternative, an authoritarian regime, may be swift and efficient. But if authoritarianism comes at the cost of our freedom, an absence of checks and balances and endemic corruption, then yes, give us democracy any time. We just have to work harder, through the democratic process, to fix these problems. We have to have faith in democracy. ————- About the author: The writer, editor-in-chief of The Jakarta Post, took part in the Bali Civil Society and Media Forum, organized by the Institute for Peace and Democracy and the Press Council, on Dec.5-6.