A prominent art collector has filed a lawsuit against Christie's auction house, claiming the company failed to properly disclose that a Pablo Picasso painting was previously owned by someone with drug-related criminal convictions. The case centers around Picasso's "Femme dans un rocking-chair (Jacqueline)" from 1956, which was sold during a Christie's evening auction in London in February 2023.
Collector Sasan Ghandehari, a venture capitalist who appears on the ARTnews Top 200 Collectors list alongside his wife Yassmin, filed the lawsuit through his company Brewer Management Corporation (BMC). The British Virgin Islands-based company had agreed to serve as a third-party guarantor for the painting, promising to purchase the artwork for £14.5 million if it failed to sell during the auction.
According to the lawsuit filed in the High Court of England & Wales, Chancery Division on July 21, the painting was previously owned by José Mestre Sr., also known as José Mestre Fernández. Mestre Sr. was investigated by police and subsequently sentenced to nine years in prison and fined €14 million after authorities discovered 202 kilograms of cocaine hidden on a cargo ship in 2010.
The legal complaint alleges that Christie's informed Ghandehari that the painting's owner at the time of sale was José Mestre Jr., the son of the convicted drug trafficker. However, BMC claims it would never have agreed to the third-party guarantee contract if Christie's had properly disclosed the elder Mestre's criminal conviction and drug-related activities. The lawsuit suggests that the auction house was "positively misleading" about the ownership and provenance of the artwork.
Third-party guarantees have become increasingly common in high-profile art auctions as a way to transfer the risk of failed sales from auction houses to outside parties. Under such arrangements, guarantors receive a portion of the proceeds if the artwork sells above the guaranteed amount, but they must purchase the work if no other buyers emerge. Ghandehari had previously served as a guarantor for other Picasso works sold by Christie's.
The lawsuit claims that a senior Christie's executive told Ghandehari that Mestre Sr. had passed away and that there were no issues with the painting's ownership history. BMC argues that Christie's failed to disclose the potential that the artwork could represent proceeds from criminal activity, which would have been crucial information for making an informed decision about the guarantee agreement.
Ghandehari and BMC are seeking to have the third-party guarantee contract cancelled and are requesting the return of a partial payment of £4.8 million that was already made. The lawsuit raises important questions about auction houses' obligations to disclose potentially problematic ownership histories to guarantors and other parties involved in high-value art transactions.
A Christie's spokesperson responded to the allegations, stating that "this is a straight-forward debt claim and Christie's will robustly defend this claim and continue to pursue the sums rightfully owed to it." The auction house emphasized that it "owes duties of confidentiality to its clients, bidders and buyers but is confident that it has complied with all legal and regulatory obligations in relation to due diligence of the work and our consignor."
The case highlights the complex issues surrounding art provenance and the responsibilities of auction houses when dealing with works that may have questionable ownership histories. As the art market continues to grapple with questions of transparency and due diligence, this lawsuit could have significant implications for how auction houses handle disclosure obligations in future transactions involving third-party guarantees.
