By Jacqueline Perrotta
Over the past 30 years, the Art World has become the Art Market. Selling and purchasing art has become Big Business for collectors and investors alike. In a mostly unregulated market, new regulations are emerging on resolving disputes between parties involved in art deals.
On July 13, 2020, subject-matter experts including lawyers and professors with experience in the art sector and in arbitration, gathered to form these new “Regulations on Arbitration in the Art Sector of the Venice Chamber of Arbitration” as a way to better resolve art disputes.
A January 2021 article, “Art and Arbitration: an overview in light of the new Regulations on Arbitration in the Art Sector of the Venice Chamber of Arbitration,” highlights the context of the regulations in today’s global art market, the advantages of using arbitration for art sector disputes, and the new regulations, including their importance and potential impact on how the art market resolves disputes.
Described as the first initiative of its kind in Italy, the regulations promote the use of arbitration and provide an alternatives to the Hague’s Court of Arbitration for Art, or CAfA. Established in 2018, the Court of Arbitration for Art was founded to resolve disputes through alternative dispute resolution throughout the art market. Through CAfA, disputes can be arbitrated or mediated with the help of the Netherlands Arbitration Institute.
Disputes that arise in art parallel commercial transactions, but with niche concerns including issues of cultural and religious sensitivity, confidentiality, and authenticity.
The use of these regulations for art arbitration comes with several upsides. The article linked above highlights a prominent advantage where arbitration is efficient and is “freely accessible”–having an arbitration clause already baked in to provide a jumping off point if a dispute arises out of difficult cultural matters or from the uncertainty of fraudulent works.
Another upside discussed in the article that comes with using arbitration is “guaranteed confidentiality,” because art-market players often are sensitive regarding “reputation and discretion,” and there is a heightened importance of privacy for collectors and dealers.
The goal of the Venice Chamber regulations is also to broaden the use and scope of arbitration to the contemporary art context and go beyond the limited definitions of national legislation. By introducing the regulations, arbitration as a means of alternative dispute resolution is promoted as an efficient and effective way to resolve art sector disputes.
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The author, a J.D. student who will enter her second year this fall at Brooklyn Law School, is a 2021 CPR Summer Intern.