An extract from The Art Law Review, 1st Edition

Art disputes

i Title in art

Art and antiquity have wide meanings and interpretation. The connotation extends to various articles, such as paintings, books, statues, sculptures, manuscripts, objects and heritage sites as contained in Section 2(1)(a) of the Antiquities and Art Treasures Act 1972 (the Antiquities Act). The law under the Antiquities Act not only examines the 'buyer' of an art or antique object or item, but also recognises those who are in possession, by ownership, possession or inheritance.

The transfer of title in an antiquity or art item by means of an auction or a private sale is accompanied by requirements such as registration under Section 14 of the Antiquities Act. This registration is mandated in a time-bound manner of three months for a person who owns, controls or possesses such antiquity, from the date on which such item is declared an 'antiquity' by the central government through a notification. For all other persons, registration is mandated within a period of 15 days of the person owning, controlling or possessing such antiquity.

The transfer of title through purchase or by gift, and licensing, entails necessary scrutiny by the person accepting the art or antiquity in respect of its authenticity, source, origin, registration, licence and all such determinants indicating its nature and origin. The lack of necessary licence or registration will result in criminal prosecution under the Antiquities Act.

The ancient Buddha statue displayed at the High Commission of India in London is a notable instance of title claims being put forth and considered favourably in India's art heritage. In this instance a claim was put forth to the UK government and the arbitration award was in favour of the Indian government.

ii Limitation periods

The limitation periods for bringing about civil claims in India is governed by the Limitation Act 1963, which contemplates a period of three years from the date of accrual of cause of action to sue as the statutory period within which a claim or suit shall be preferred. There is a fine distinction drawn between the 'date of first accrual of the right to sue' versus the 'date of accrual of the right to sue'. Article 113 of the Limitation Act prescribes the limitation period for suits or claims not falling under any specific category of the said statute to be three years from the date on which the right to sue accrues, unlike in other articles of the Limitation Act, which refer to the first instance of the accrual of the right to sue. This distinction has been analysed in various cases. Under Article 113, the period of limitation would be computed depending upon the last day of the cause of action arising. However, while considering the limitation period for 'declarations' (title, ownership, etc.), it shall commence from the date on which the right to sue 'first' arises.

Therefore, the facts and claims set out in a case will determine the applicable period of limitation in civil cases.

With respect to criminal action, the limitation for any crime punishable with imprisonment above seven years shall be while the accused is alive, and, in the case of multiple accused, while all or any one of accused is alive.

The Antiquities Act stipulates a maximum imprisonment of three years for any contravention of Section 3. Because the penal provision is less than seven years, the limitation period to initiate criminal action is three years under Sections 468 and 469 of the Criminal Procedure Code 1973, commencing from (1) the date of the offence; (2) where commission of the offence was not known to the aggrieved, the first date on which such offence comes to the knowledge of such person or any police officer (whichever is earlier); or (3) where it is not known by whom the offence was committed, the first day on which the identity of the offender is known to the aggrieved or a police officer (whichever is earlier).

Contracts for sale or purchase of art or antiquities may be in writing through contract, or merely evidenced through invoices, and in some cases only contain a record of payment in support of the sale. Agreements containing governing law clauses with Indian law as the chosen law are bound by the three-year limitation period to initiate proceedings. Arbitration clauses are said to survive the termination of the underlying contract, entitling the parties to invoke and initiate arbitration within a period of three years from the date on which it is commenced as per Section 21 of the Arbitration and Conciliation Act 1996 (the Arbitration Act).

iii Alternative dispute resolution

The Indian art industry is flooded with legal ambiguities. The consistent growth in the strata of high-net-worth individuals or families (HNIs) in India and the increased frequency and magnitude of online and other auctions has contributed to the growth of the Indian art market.

In an arbitral award passed in December 2014, the arbitrator considered the claims of auction house Bid & Hammer seeking payment of its dues towards a Ravi Verma painting, bid for and purchased by Kiran Nadar. Ms Nadar had disputed the authenticity of the 120-year-old painting. The tribunal observed that the respondent's expert himself was not sure of the authenticity of the painting in question and that a suspicion could never partake in character of a proof in a court of law. Therefore, the tribunal held the painting to be genuine. This decision was perhaps the first of its kind in India where a dispute in relation to the authenticity of art was brought before a legal forum. There is clearly a need for judicial precedent in the Indian art framework setting out some of the best practices in the authentication process during sale offerings. Although arbitral awards do not carry precedential value, this case can certainly be said to be a small yet significant step in encouraging legal intervention and exposing vested interests in the art market.

There are questions as to the maintainability and enforcement of awards passed by such institutions owing to the statutory restrictions placed under the Arbitration Act. Sections 34 and 48 particularly render an award arising out of an 'inarbitrable' dispute, such as title, fraud and copyright, unenforceable in India. It has been established that art disputes arising from testamentary or succession matters are inarbitrable in India. Cases of art-related fraud are dependent upon the specific facts of each case, with judicial precedents indicating arbitrability in cases involving internal affairs of parties.

There is also a possibility of parties subsequently executing agreements to negotiate or arbitrate disputes that arise in respect of such art or antiquity. Arbitration and private mediation appear to be preferred means of resolution due to their time-efficient and confidential nature.

The Antiquities Act stipulates that the Archaeological Survey of India (ASI) shall be the determining authority for classification of an item as an 'art' or 'antiquity'. Parties must be afforded the opportunity to appoint experts who are conversant with the standards and parameters of the art market to make determinations as to age, authenticity, etc., of the art object. Although the Arbitration Act recognises and permits the parties and the tribunal to appoint an expert under Section 26, in instances where the tribunal fails to refer the question of authenticity to the ASI or disregards the ASI's opinion, there is a possibility that the award passed may succumb to a Section 34 challenge.

The Supreme Court of India has ruled that in the case of a conflict, the provisions of the Antiquities Act will override the provisions of a general enactment covering the same aspect. There is much to be explored in this area as such precedence is likely to create new problems. For instance, the right to engage experts under Section 26 of the Arbitration Act will stand to be overridden by Section 24 of the Antiquities Act, which is likely to affect the analysis as to the age of the artwork. This puts the potential award at a risk of challenge at the stage of a Section 34 petition, for possibly being 'contrary to the public policy of India'. Much remains to be explored on the conflict of law aspect of this discussion; however, the recent developments point to a growing enquiry into these concepts.