In today’s judgement, the Court of Justice of the European Union ruled that the cost of the royalty payable to the author on any resale of a work of art by an art market professional may be borne by the seller or the buyer(!).

Creators of original works of art are entitled to a royalty based on the sale price obtained for any resale, subsequent to the first transfer of the work. This right applies to all acts of resale which involve art market professionals (salesrooms, art galleries and, in general, dealers in works of art) as sellers, buyers or intermediaries.  

In Christie’s France SNC v Syndicat National des Antiquaires, the dispute concerned a term on Christie’s France general sales conditions. Specifically, the auction house Christie’s France provides in its general sales conditions that, where applicable, it will collect the amount representing the resale royalty from the buyer, for and on behalf of the seller. The Syndicat National des Antiquaires (SNA) challenged this practice by arguing that in charging the buyer for the resale royalty, Christie’s general conditions amount to unfair competition.

Hearing the case, the French Court of Cassation has asked the Court of Justice whether the seller is always definitely to bear the cost of the resale royalty or whether it is possible for the parties to agree otherwise.

In its judgement the Court declares that the Member States alone may determine the person liable for the royalty. EU Directive 2001/84/EC provides that the person by whom the royalty is payable is, in principle, the seller. It nonetheless allows for a derogation from that rule. The Court held that the person designated as responsible to pay the resale royalty by national law may agree with any other person, including the buyer, that that other person will bear the cost of the royalty.