In a landmark judgment, a French court held on 24 March that art sellers must pay artist’s resale rights.

The ruling from the Versailles Court of Appeal marked the culmination of an eight-year legal battle between Christie’s auction house and two French associations of antique dealers and galleries. The battle began when the Syndicat National des antiquaires (SNA) and the Comité des galeries d’art sued Christie’s for unfair competition and abuse of its position. Christie’s had insisted that buyers pay artist’s royalties for works sold during an Yves Saint Laurent-Pierre Bergé sale in 2009.

The associations held that the auction house was liable to pay resale rights under French law. President of the Galerie Carré, Patrick Bongers, told the Art Newspaper that “if everyone follows the law and Christie’s decides not to, it obviously gives the company an unfair advantage in attracting collectors”. In its defence, Christie’s argued that buyers ought to pay the rights to stimulate the art market and encourage collectors to sell their works in France rather than in the United States or China where no such rights exist.

Artist’s resale rights provide for the payment of royalties to an artist’s heirs upon the resale of his or her works 70 years following the artist’s death. During the artist’s lifetime, the royalty is payable on the second and subsequent sales of artworks. Resale rights were adopted in France in 1920 and now apply in 65 countries, including those in the European Union. In the UK, the company in charge of the sale decides whether the seller or buyer of a work pays resale rights.

Following defeat in the Court of Appeal in 2012, Christie’s pursued the case in the French Supreme Court. It argued that the Court of Appeal ruling contravened a European Directive on artist’s resale rights under which member states may derogate from the rule that sellers must pay and allow responsibility for payment to be transferred to the buyer by contract. When the case returned to the Court of Appeal on 24 March a different judgment was laid down. It was held that the French government had chosen not to derogate from the rule even if the directive authorised this.

This latest decision has been warmly welcomed by the SNA as safeguarding competition in the art market. SNA President, Mathias Ary Jan, said the judgment “protects dealers against disloyal competition from the auction houses as well as the rights of collectors who were illegally charged with this payment”. Christie’s plans to return to the Supreme Court.