Using arbitration to resolve cultural property disputes

by Laurens Kasteleijn and Lucy Grenfell of Art Law Services 

‘The art world places much reliance on confidentiality, on close personal relations, and a corpus of grey letter law: ethics, guidelines, conventions and codes rather than legal rules. To these factors are added, in the case of public museums, a vulnerability to political change, a pre-occupation with scholarship, and (perhaps) a desire to be seen to act elegantly or fashionably as well as honourably.’

This quote from scholar and pre-eminent cultural property lawyer, Norman Palmer, articulates why alternative dispute resolution (ADR) is perhaps best suited to resolving disputes pertaining to the art world and cultural property. Despite the range of avenues available to parties seeking to resolve cultural property disputes, the benefits of arbitration in the resolution of these matters are many.

In short, arbitration replaces proceedings before the court, with administration of justice carried out by arbitrators. While court proceedings are typically time consuming, costly and often a public process for those involved, arbitration seeks to provide users with a more expeditious and confidential decision making alternative. It is commonly accepted that arbitration allows for greater flexibility and control over the outcome when compared to litigation as a means for resolving disputes.

Cultural property disputes can take on a variety of forms. For the purposes of this text, let’s turn our attention to what continues to be a major concern for many countries, that is, the restitution of cultural property from one country to another. The extent of this concern and the need for effective methods of redress has been legitimised by the establishment of numerous international instruments.^[1] Despite widespread ratification of the 1954 Hague Convention, the 1970 UNESCO Convention and, to a lesser degree, the 1995 UNIDROIT Convention, seeking restitution of cultural property through the court system of a foreign jurisdiction is an arduous task. With the issue of ownership being central to cultural property disputes, parties can seek restitution through the court system in a foreign state; however, access to litigation, procedural shortcomings and political sensitivity can render ADR more appealing. In fact, a majority of disputes concerning looted cultural property which have arisen in the past four decades have been settled out of court.^[2]

Negotiation is used extensively to settle cultural property disputes, and though difficult to quantify due to its largely confidential nature, mediation is also used. While both negotiation and mediation are prima facie non-binding, arbitration is different. Should two parties elect to refer a dispute to arbitration, they will be bound by the arbitral award. The power of arbitration as an effective means for settling cultural property disputes lies in the parties' ability to mould the process to their needs, yet the use of arbitration to settle cultural property disputes is not as common as the aforementioned forms of ADR. In 2018, and in response to this, the Court of Arbitration for Art (CAfA) was established in The Hague, the Netherlands. As a joint initiative of the Netherlands Arbitration Institute (NAI) and Authentication in Art (the AIA), CAfA was established as a specialised arbitration and mediation tribunal exclusively dedicated to resolving art law and cultural property disputes.

Arbitration carried out through CAfA reflects many, if not all, of the advantages generally associated with arbitration and is administered by the NAI (which has a long history of administering domestic and international arbitrations).^[3] All awards made by CAfA are confidential, although with the consent of the parties, a handful of awards are published anonymously in the Dutch journal of arbitration.^[4] Where parties elect to arbitrate through CAfA, matters will typically be heard by an arbitral tribunal of three unless otherwise agreed, and the arbitrators must be selected from an extensive list compiled by the CAfA board and NAI^[5]. The ‘Pool of Arbitrators’ consists of those with proven experience in handling art law and cultural property disputes, and are carefully selected following a thorough vetting process. It is worth noting that CAfA is similarly undertaking work to develop a pool of experts in the fields of forensic science and provenance research, to assist where questions concerning material analysis and/or provenance arise during a CAfA arbitration. CAfA provides clear guidance on the process for initiating arbitration, as well as a recommended clause for inclusion within contracts where parties agree to submit any future disputes that may arise to arbitration. As the arbitral tribunal is seated in The Hague, the Netherlands Arbitration Act applies to the arbitration generally however parties seeking to resolve disputes through CAfA may be seated anywhere in the world.

As is the case with arbitration, any award made through CAfA is binding. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, referred to as simply the New York Convention, is a key instrument in international arbitration, and execution of awards by CAfA takes place in accordance with this. This acts to guarantee the broader enforcement and execution of arbitral awards and, in most cases, is easier than a judgment from a foreign court.

Principally, ADR allows parties to find ‘fair and just solutions’. That is, an outcome that may not constitute categorical restitution or rejection of a claim. A fair and just solution to a cultural property dispute may comprise anything from compensation, sale to a third party, the granting of ownership without taking possession, or even co-ownership in some cases. Cultural property claims are often highly sensitive and emotional in nature, and tend to have political implications. The importance of a claiming party receiving some form of acknowledgement for the specific injustice suffered that forms the basis of their claim cannot be understated. In addition to a fair and just solution being reached, ADR allows for such acknowledgment. A compelling feature of using arbitration to resolve cultural property disputes is that it can do so with a degree of confidentiality and control that traditional forms of dispute resolution would otherwise not afford.

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