Sotheby’s Sues Chinese Buyers for Nonpayment of Art Won at Sale

Feb. 10 (Bloomberg) -- Sotheby’s is suing two Chinese for payment on HK$2.1 million ($270,300) worth of antiques they won at its Hong Kong auction in October “to send a message it won’t stand for defaults,” said Asia chief executive Kevin Ching.

The winning bidder on a Qing Dynasty cloisonne censer and cover failed to pay “despite repeated requests and demands,” Sotheby’s said in a copy of its Jan. 30 filing to the city’s High Court that the company provided to Bloomberg. The U.S.- based auction house is also pursuing another buyer who won five antique paintings and wouldn’t pay.

“We can’t have people bid at our auctions and disappear without paying,” Ching said in a telephone interview. If the buyers don’t respond to the city’s ruling, Sotheby’s may apply for the judgment to apply on the mainland, in case “they think the long arm of Hong Kong law couldn’t reach them,” he said.

Hong Kong is the world’s third-largest art market after New York and London and a conduit for the mainland’s antique trade. China-related art-auction defaults hit the headlines last year after southern Chinese dealer Cai Mingchao’s successful $40 million bid on two Qing Dynasty bronzes at the Feb. 25 Yves Saint Laurent sale hosted by Christie’s International in Paris. Cai then refused to pay, citing the items’ controversial background as looted items.

Christie’s Asia President Francois Curiel this week declined to say if Cai has paid for the bronzes, citing client confidentiality. Cai said he hasn’t paid for the items and that Christie’s hasn’t contacted him since last year’s furor. Curiel said he believes disputes can be settled in an amicable manner.

The city operates under a separate judiciary system than that in mainland, as part of the “One Country, Two Systems” principle that underpinned its return to Chinese rule in 1997.

Sotheby’s Sales

Beijing-based Wei Qifang won the censer and cover at a sale of Chinese antiques on Oct. 8 for HK$800,000, which includes HK$150,000 in commission for Sotheby’s. The other defendant, Ye Junming, based in the southern Chinese city of Shenzhen is told to pay HK$1.28 million, including HK$253,500 in fees, for paintings in the Oct. 5. sale.

Sotheby’s and Christie’s hold biannual auctions in Hong Kong focused mainly on Asian artworks. Last year, Sotheby’s sold about HK$2 billion of art, gems and antiques in the city.

Mainland Chinese buyers have emerged in the last year as the dominant buyers at the city’s art auctions, supplanting Americans at the priciest end of the Chinese antiques market. Ching, a lawyer by training, reiterates the importance of cultivating mainland Chinese clients while enforcing contracts.

“This isn’t targeting the mainland Chinese,” said Ching, 53. “This applies to whoever defaults.”

Sotheby’s declined to provide the bidders’ telephone contact details on client confidentiality; their phone numbers couldn’t immediately be tracked down using China’s public enquiry service. The writs are now being delivered to the defendants in China through the Chinese court, according to Dick Lee, a Sotheby’s Hong Kong based spokesman.