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Frans Hals’ Portrait of Pastor Tegularius (1581/5-1666) was one of about 200 pictures taken first by the French and then confiscated by the Germans from the collection of Jewish businessman Adolphe Schloss. It reappeared in New York in the late 1960s and changed hands several times before Mr Williams bought it at auction at Christie’s in London for £100,000 on behalf of Newhouse Galleries, New York.

The reason that he has been picked out from the other purchasers of the picture since the 1960s for prosecution by the French authorities is that he offered it for sale at the Paris Biennale in 1990 where he was representing Newhouse. That act brought him under French jurisdiction. The painting, which he had labelled as being from the Schloss collection, was confiscated after being recognised by a descendant of the family. Christie’s later compensated Newhouse in full, but, says Mr Williams, the French authorities only have the power to prosecute the individual, not the company. Had Mr Williams bought the painting in Paris or New York, the French authorities would not have been able to prosecute him as auction houses there have to guarantee free and clear title to lots; in London they do not, with the result that Mr Williams unwittingly took possession of looted goods.

French courts have already thrown out the case twice, the last time in 1996, but now, in what appears to be a political move fuelled by the recent high profile cases of Nazi looted art being restored to owners, the Government has decided that it still has a chance to bring a successful prosecution.

Mr Williams told the Antiques Trade Gazette that part of the French Government’s argument is that he did not follow due diligence procedures in ensuring the picture was not stolen, but he explained that it would have been almost impossible to do so.

“Of the looted pictures, 200 or more were returned to the family after the war and they auctioned some of them off in 1947, ’49 and ’51.”

The only written record stating which had been auctioned off and which were unrestored looted art is kept in a small French town which is a six-hour train journey from Paris, he explained.

“It’s a very terrifying aspect of the Trade that you can walk into a London auction house and buy a piece in good faith and then be faced with this sort of thing,” he said. “I am as much a victim in this as the Schloss family. This is now a problem for all the Trade.”

It is thought the case could take months to come to court.