Noga's Arrest a No Go
// Painting from the Pushkin Museum arrested for a while
Scandal
A grandiose scandal began and ended yesterday when it was made public in the morning that 54 paintings by French artists from the Pushkin State Museum of Fine Arts had been arrested in Switzerland on a suit by the Swiss firm Noga, which has been in court against Russia for almost 15 years. In the evening, Swiss authorities, frightened by the emerging uproar, changed their minds and the pictures were released from arrest. Noga's bankrupt owner, Nessim Gaon, received no benefit from the adventure, and Swiss authorities have egg on their faces.
Artists Taken Hostage
The Swiss customs office received a message marked “urgent” on Tuesday with instructions to seize a valuable shipment, three trucks heading to Russia. That night, the trucks, loaded with canvases by French artists, were detained near Basel. A fourth truckload of canvases was seized at the Geneva airport. The paintings included works by Renoir, Degas, Manet, Monet, Van Gogh and Gauguin. The entire collection was insured for $1 billion.
At first, customs officers thought that they were dealing with smugglers. The truck drivers were ordered to turn off their motors. Those engines also powered the air conditioning that kept the temperature and humidity for the canvases under strict control. They could have been damaged. The people accompanying the paintings were practically arrested. Their passports and cellular phones were seized and they were detained in the custom's services premises.
Only after the Russian embassy cleared the situation up the next morning did the customs service allow the trucks' engines to be turned back on and the trucks to be moved to a warm place. The pictures' attendants were allowed to go to hotels.
This was the second time the paintings, which had been on exhibit in the Fondation Gianadda gallery in Martigny since June 17, were seized in a week. After the exhibit was over, the collection was to return to Russia but, on November 11, bailiffs from the Canton of Valais placed the collection under arrest on order of the Geneva bureau of debts claims and bankruptcy.
This development was not made public. The Swiss and Russian foreign ministries tried to settle the problem politely. The Russians were able to have the arrest lifted and the trucks proceeded to the Swiss-German border. But they didn't get far.
The second arrest was publicized. Russian society was indignant that the Noga firm, which has been in court with the Russian government for more than ten years, had again encroached on cultural treasures. It was that firm's suit a judge in Martigny had responded to.
The arrest caused a storm of emotion in Moscow. The Federal Agency for Culture and Cinematography demanded that Swiss authorities “cease their lawlessness.” Deputy director of the Russian state cultural treasure service Anatoly Vilkov told Kommersant that the safety of the pictures was guaranteed by the administration of the Canton of Valais. Chancelier d'Etat of Valais Henri de Roten had signed a letter guaranteeing that every painting would be promptly returned from the museum and confirming that no claims against the pictures as objects of property would be allowed.
Pushkin Museum director Irina Antonova told Kommersant that the arrest of the pictures was a promotional stunt by the Noga firm. “Everything was properly conducted,” she recounted. “After the exhibit, we were given a permit to remove the paintings and told that the collection should be removed from Switzerland within five hours. And the trucks were arrested on the border. It is a mystery why the Swiss government lets itself be lead around by the nose by a private company. The arrest of works of art is an illegal act.”
Last night, the Swiss put an end to the scandal. The Swiss Federal Council ruled that the cultural treasures from the collection of the Pushkin Museum could be removed from the country. Its decision was based on article 148 of the Swiss Constitution, which allows the federal body to “take necessary measures to protect national interests.” The order went into effect immediately on passage and was not subject to appeal. The order emphasized that “national cultural treasures are public property and are not subject to confiscation.”
The Show Must Gaon
The story of the hostilities between the Noga firm and the Russian government goes back more than ten years. In that time, the founder of the firm, Nessim Gaon, has gone bankrupt and been involved in several major corruption scandals.
The basis of the Noga's claims is an agreement signed in 1991 by First Vice Premier of the RSFSR Gennady Kulik on the supply of food to Russia in return for petroleum products. The agreement signed had massive legal errors in it and lacked the banking details necessary for monitoring its fulfillment. In the agreement, Russia gave up its so-called sovereign immunity, meaning that, if the agreement was not fulfilled, any assets of the RSFSR could be seized. The conflict arose in 1993, after Russia unilaterally terminated the agreement.
At first, the Russian government tried to reach an out-of-court agreement with Gaon. But he won his first suit in a court in Luxembourg in 1993, and won the appeal of the decision in Stockholm.
Noga's current activities come after a rather long break. Gaon and his representatives had practically given up their pursuit of Russian state property abroad in recent years. The last year of active claims was 2002. The Russian government renewed negotiations with Noga at about that time after his Gaon's lawyer threatened to seize Russian President Vladimir Putin's state airplane when he was in Paris on an official visit. Intermediaries in the negotiations, by various reports, included the French government and Credit Lyonnias and BNP Banks. Prime Minister Mikhail Kasyanov even discussed the problem with Noga with Jacques Chirac. As a result of Russian diplomacy, Gaon lost all his suits in France and was forced to give up all future claims against Russian property in that country.
The Russian government proposed a debt repayment schedule, but it did not suit Gaon. Moscow intended to pay the debt a part of its London or Paris Club debts and by the Clubs' rules: 30 percent of the debt would be written off and the remainder restructured and paid in 2010 and 2030. The 80-year-old Gaon replied that he would not live to see it. He promised to keep fighting and receive all $1.2 billion, interest included.
In recent years, Gaon has also been in court with his creditors. Because of his financial hardships, he has been forced to trade the services of Marc Bonnant, one of the best lawyers in Geneva, for those of little-known lawyer Allen Veillet.
Veillet spent about a year preparing the current suit against Russia, after the Russian Finance Ministry officially refused to negotiate with Gaon on his terms. According to a Kommersant source in the Russian government, Moscow's terms have not changed – restructuring of the debt according to London Club procedures.
Swiss Cheese Board
The current paintings suit may have several side effects. A conflict has arisen between Russia and the Swiss government, which has dared to place an arrest on world cultural treasures. Russia and Switzerland are already involved in a number of legal cases. The trial of Vitaly Kaloev just ended. He was found guilty of the murder of air traffic controller Peter Nilsen. The trial received wide coverage in the Russian media, which were unanimously on the defendant's side and painted him as a victim of the inhuman Swiss court system.
Another sensitive case is reaching it climax, that of former Minister of Atomic Energy Evgeny Adamov. On October 3, the Swiss Federal Department of Justice chose between Russian and American extradition requests in favor of the Americans. On November 1, Adamov's lawyers appealed that decision in a federal court in Lausanne. A date for the hearing of that case has not been set. The current scandal is likely to become an instrument of psychological pressure by Russian authorities on the Swiss.
The case also has propagandistic value for the Russians. The arrest of the paintings will most likely be portrayed as the latest instance of the Swiss legal system's partiality and promiscuity and proof of its anti-Russian prejudice. Nothing could suit the Russian domestic political situation better. The happy return of the collection of paintings to the homeland will become the great victory of Russian authorities over their foreign enemies, whose intrigues have become the standard explanation for the majority of Russian political problems.
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The History of the Conflict between Russia and the Noga Firm
The legal conflict between Noga d'Importation and d'Exportation SA and Russia has been in progress for more then ten years. In 1991 and 1992, Noga head Nessim Gaon (the name of the firm is an anagram of his last name) reached an agreement with Russia on the supply of food in exchange for oil. In 1993, Russia unilaterally terminated that agreement, under which it was liable for the fulfillment of the contracts with its property. Gaon says that Russia owes no less than $300 million. He claims that he has documentation and acknowledgment of the debt from Russian officials. A court in Luxembourg found his claims legal in 1993. In 1997, a Stockholm, arbitration court also sided with Noga, and ruled that Russia owed it $63 million. Later, the company made a number of unsuccessful attempts to place Russian property in Europe and the United State sunder arrest. During this time, Gaon has practically gone bankrupt. In August 2002, a Swiss court ruled to evict Gaon and his family from its apartments in the Gaon Hilton on Lake Geneva. Gaon told Kommersant in an August 19, 2002, interview that he had written a letter to Russian President Vladimir Putin, who “promised to handle it.” In November 2002, Prime Minister Mikhail Kasyanov discussed the case with French President Jacques Chirac in France.
According to Noga, the Russian debt, including interest, had reached $1.5 billion by 2004. On April 7, 2004, Noga announced that it was giving up its claims against Russia. In September, a Noga lawyer told the Swiss press that Russia has promised to pay the company a total of $1.2 billion On November 4, however, the Russian Finance Ministry issued a press release denying that information and said that Noga was due only $55 million, plus interest.
What They Arrested in Switzerland
Swiss customs seized 54 painting from the Pushkin Museum produced by French artists between the 17th and 20th centuries. The collection could fairly be called the best of the museum's holdings in paintings, covering the entire history of French painting. Among them are master of French classicism Nicolas Poussin's Rinaldo and Armida, which was transferred to the Pushkin Museum from the Hermitage in 1930 (its accompanying Tancred and Erminia remains in St. Petersburg). Rococo genius Francois Boucher's Jupiter and Callisto is one of the museum's best paintings. Among the masterpieces of French impressionism and post-impressionism are Claude Monet's Cliffs at Etretat, and Lilacs in the Sun, Edouard Manet's The Tavern, Alfred Sisley's Frost at Louveciennes, Edgar Degas' Ballerina and Ballet Rehearsal on Stage, Auguste Renoir's Portrait of Actress Jeanne Samary and Paul Cezanne's The Banks of the Marne, all from the collections of the famous Moscow art collectors Sergey Shchukin and Ivan Morozov. Also seized was What? Are You Jealous by Paul Gauguin.
What Noga Has Arrested
In June 1993, a Luxembourg court placed part of the assets of the Russian Federation, Central Bank, Economic Ministry, Finance Ministry, Vneshekonombank, Vneshtorgbank and a number of foreign trade organizations under provisional arrest. The total funded frozen totaled $600 million. Later, the Russian government was able to have the arrest lifted.
On May 18, 2000, in fulfillment of an arbitration court decision in Stockholm, which found that Russia owed Noga $63 million, the accounts of the Russian diplomatic services, the Central Bank, Vneshekonombank and a number of state companies, including Rosneft and Slavneft (which denied the information) in France were blocked. The Central Bank and Vneshekonombank accounts were unblocked in June and July when a French court ruled that the money in those banks has no relation to the Russian government. The other accounts were freed after an appeals court ruling in Paris in August.
In May 2000, Noga filed suit in an American court demanding the arrest of Russian uranium stored in the United States under an intergovernmental agreement. In September 2002, a court in New York City refused to allow the implementation of the decision of the Stockholm arbitration court in the U.S.
On July 13, 2000, the Russian sailboat Sedov was seized in the French port of Brest while it was participating in the Brest Regatta. On July 24, a Brest court lifted the arrest on appeal, ruling that the ship was not government property. An appeals court upheld that decision on August 4. Noga was required to pay the organizers of the regatta a 250,000-francs ($45,000) cancellation fee. That was when the company threatened to have Russian President Vladimir Putin's plane seized during his October official visit. That threat was not carried out.
On June 22, 2001, an attempt was made to arrest Russian Su-30MK and MiG-AT airplanes at the Le Bourget Air Show. The air show's administration helped the planes leave France in time to avoid that action. Noga filed suit in the Paris of Bobigny against a number of French officials, the management of Rosaviakosmos and the Sukoi and MiG plants for hijacking an arrested plane. On July 4, 2003, the court found Noga's claimed unjustified.
Igor Sedykh, Geneva; Vladimir Solovyev, Yulia Taratuta, Mikhail Zygar
All the Article in Russian as of Nov. 17, 2005
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