A Rudolf Stingel painting made headlines has a matter of legal tussle between Phillips, one of the most notable auction houses in the world, and the painting’s consignor. The suit was filed by Joseph Nahmad in the New York district court. Yesterday, Judge Denise Cote ruled in favour of the auction house.
The Stingel painting was supposed to be sold as part of a 20th-century auction in May this year. However, after the pandemic began in March, Phillips suspended all auctions until June. The house was initially planning to sell the painting after the gallery opened, but in June cancelled further plans of sale too. It was after this that Nahmad filed the suit claiming $7 million in compensation and $10 million in punitive damages. He claimed in the suit that the action of the house made it impossible for him to sell the painting elsewhere. The suit also asked Phillips to sell the painting in their next auction. However, the ruling rejected that request too, citing that the agreement with the house carried no compulsions to sell the Stingel painting.
Nahmad had also claimed that the house cancelled the sale only after realizing that the market for Stingel works has weakened and the house would carry losses in attempting to sell it. However, Cote made it clear that Phillips had the rights to cancel the sale through the force majeure clause. The clause refers to the relief from a contract in the face of a natural disaster, like COVID-19.
The original contract between Phillips and Nahmad was made in June 2019. According to it, Nahmad would have to place a £3 million bid on an unidentified Jean-Michel Basquiat painting. In return, Nahmad will deliver the Stingel painting for a guarantee of $5 million. The Basquiat painting went into auction in London in the same month, and Nahmad made the bid (though he wasn’t the winning bidder).