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The extraordinary downfall of Michael H Steinhardt, a once eminent collector who had a gallery in the Metropolitan Museum of Art named after him and his wife – the ‘Judy and Michael H Steinhardt Gallery’ – was told in the December 18 issue of ATG (No 2522).

For dealing in a vast number of looted antiquities, Steinhardt has been barred for life from acquiring antiquities again. Many would say he was lucky not to end up in prison.

It was reported that 180 seized antiquities were looted and illegally smuggled out of their respective countries of origin, thus rendering each of them stolen property under New York criminal law, according to the Statement of Facts issued with the Judgment.

It was also pointed out that some of the forfeited items have relatively long art market histories and that one of them, an Anatolian Terracotta Idol, first surfaced on the international art market in 1975 at a Sotheby’s London auction.

Some of the works will have been sold many times, over decades, to unknowing purchasers who bought entirely innocently.

The article pointed out that under New York law, a ‘good-faith’ purchase does not render a stolen item legal, nor does it matter how much time has elapsed since the theft. In other words, the true owner can retrieve the stolen item however many years pass, even though an innocent goodfaith purchaser has bought the work decades later.

Different jurisdictions have varying laws on this point and at times there has been much discussion surrounding the balance between the ‘original owner’ and a subsequent bona fide honest purchaser without notice of the theft. Which one should the law favour?

English law

In English law one turns to provisions of the Limitation Act 1980, which one judge in an important case on the issues referred to as “virtually impenetrable”.

The case in question – De Preval v Adrian Allen Limited (1997) – involved a well-known dealer who tried to auction two French gilt bronze and enamel candelabra by the 19th century French sculptor Barye. The dealer claimed to have bought them in good faith, relying on what he was told by the seller that he had the right to sell them.

The candelabra were placed into a Sotheby’s auction in 1994. The original owner, Nicole De Preval, then turned up trying to halt the sale and claim back the candelabra.

The whole case turned on the relevant provisions of the Limitation Act which the judge determined meant as follows (italics as per the judgement):

“Once… a bona fide purchaser acquires the chattel, and six years has run from the date of his acquisition, the owner cannot sue a person who acquires the chattel after the date of the bona fide purchaser’s acquisition, even if he is not himself a bona fide purchaser (he may be a purchaser with notice or a volunteer).”

In other words: where a purchaser in good faith of stolen goods is involved, the owner’s title to the goods can be extinguished, and his/ her right to make a claim barred, after six years from the date of the good faith purchase.*

‘Good faith’ is not something necessarily very easy for a purchaser to prove and in De Preval the judge went very carefully through what the purchaser had said in the witness box and concluded that on balance it had not been proven, so that in the final words of her judgment:

“The plaintiff therefore succeeds in her claim to have the candelabra delivered up to her.”

The dealer had to give up the candelabra.

Time limit debate

It is very arguable, and has been argued, that this six-year time frame allowing a bona fide purchaser to deprive the original owner of ownership is unfair and that, for example, the New York provisions with no such time limit are more ethical.

* Museums and other institutions subject to Holocaust art claims operate under a separate regime in the UK, where the Spoliation Advisory Panel considers the legitimacy of claims made under wide criteria.

While the panel “will consider legal issues relating to title to the object”, these criteria include, as the guidance expressly states, taking into account “non- legal obligations, such as the moral strength of the claimant’s case”.

Milton Silverman is senior commercial dispute resolution partner at Streathers Solicitors LLP, London.