Any remaining ability by sharp operators to by-pass the auction house's normal checks for money laundering and ramping would be considerably diminished by a simple row over a silver box sold at auction.
A buyer needed to know the name of the seller so that he could take action to resolve the dispute. The suit clarified the buyer's entitlement.
The proceedings could be the despair of an industry operating in a market that recently come under greater pressure from re-enforced copyright and resale royalty payment obligations, the need for loading of commissions and fees to offset rising costs and increased competition for top end business and heightened selectivity of buyers.
Given the extra-territorial reach of New York corporate legislation, the implications are likely to be felt well beyond that state.
That is unless auction houses cease operations there, as is being suggested by some informed commentators.
The respect for the power of the New York courts is already acknowledged by those auction houses around the world who are clearly identifying unsold lots as such at the time they are knocked down.
This became a requirement in New York in the 1990s after the New York legislature put the industry under close scrutiny and introduced laws requiring greater transparency.
The enhanced access to provenance now identified as a requirement of an existing law would be a great boon to scholars. Ironically though, it could diminish the role of the saleroom reporter as much of the information which titillates would be freely available to all.
So tight and managed is the information presently available to reporters that the slightest personalisation of sales is seized upon with relish to place before the public.
According to a report in London's Antiques Trades Gazette, Christie’s has joined auctioneers William J. Jenack in a bid to overturn a legal ruling that says New York salerooms must reveal consignors’ names to buyers.
Rejecting the claim that New York's auctioneers follow common practice when preserving the anonymity of their clients, the Supreme Court said in September that a binding auction contract in the state must include the name of both buyer and seller.
The shock September 19 ruling delivered by Justice Peter B. Skelos of the Supreme Court of the State of New York, Appellate Division was prompted by an otherwise 'routine' legal action brought by Chester, New York saleroom William J. Jenack against a buyer who declined to pay his bill.
In September 2008, Albert Rabizadeh, a Long Island-based dealer in Russian works of art, had bid $400,000 ($460,000 including buyer's premium) for a silver and enamel box by Ivan Petrovich Khlebnikov.
When his buyer failed to pay, Jenack began legal action that in January 2010 saw Rabizadeh ordered by the New York State Supreme Court to pay $497,398 minus $109,250, the price achieved when the box was reoffered in May that year, the ATG reported.
However, the case took a less orthodox route when Rabizadeh took the court's decision to appeal and argued that the auction house had lacked the proper documents to demand payment.
His argument was based on the letter of the General Obligations Law, the statute covering contracts between buyers and sellers in New York, which says a legally recognised contract must include the names of both parties.
The General Obligations Law states: "Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or his lawful agent."
"If the goods be sold at public auction, and the auctioneer at the time of sale, enters in a sale book, a memorandum specifying the nature and price of the property sold, the terms of the sale, the name of the purchaser, and the name of the person on whose account the sale was made, such memorandum is equivalent in effect to a note of the contract or sale, subscribed by the party to be charged therewith."
Australia has become so removed from the principals in the New York auction industry that the ruling would be most unlikely to have any immediate flow on Down Under. Christie's does not auction in Australia and Sotheby's interest in the Australian auction market is through a franchise agreement which clearly states that it is not responsible for the operations of that franchise held by Sotheby's Australia Pty Ltd.
London-based Bonhams is not as corporately centred in New York as the two big fine art auction houses and its geographical independence can be seen in the frequent practice of its auctioneers outside New York of not calling out "unsold" when a lot fails to sell.
This practice was followed at auctions held throughout the world by Sotheby's and Christie's after the same New York courts determined that unsold lots should be knocked down with complete clarity of their status as such.
The words, sometimes whispered through clenched teeth, as no auctioneer ever likes to concede failure to sell, made it far more easy for observes to work out what was happening at an auction and act appropriately.
They became required following a statement by a director of Christie's, David Bathurst in 1981 that two major paintings by Van Gogh and Gauguin had sold when they had not.
Bland cataloguing of works as the "property of a lady" or from "a distinguished private collection" have been of little value to buyers looking to contextualise a work.
Indeed it has been the source of many jokes beginning with a trader's comment to a consignor who is fellow member of the trade sporting a moustache: "George, I had no idea you were a lady."
Auction houses increasingly have sought to identify sellers especially in view of today's fascination with celebrity.
But of course the consignor could well be a monster or agent for the same, That would not go down so well over the dinner table when guests turn up to see the purchase.
Publication of the identity of the vendor must make life more difficult for anyone ramping an artist's work or laundering money.
The heightened provenance diminishes the chances of stolen work going to auction and for dealers to masquerade as collectors.
Directors of art museums would no longer be able to make fancy claims about the origins of their purchases in distinguished but unnamed collections. Shady characters on the fringes of the trade (especially in antiquities) whom even Freedom of Information searches fail to draw out, would be there for all to see.
Awareness of the importance of the ruling has been largely thanks to Larry Rothfield's Punching Bag Blog: larryrothfield.blogspot.com
Rothfield teaches at the University of Chicago and blogs on cultural issues.
"The implications for an art market that thrives on its inherent opacity are interesting, to say the least," he writes.
"Perhaps understandably, the Jenack auction house is appealing that judgement and it has now been joined by Christie’s. So what chance of this ruling be upheld?"
Larry Rothfield was interested in the implications for antiquities sales since it is a reasonable assumption that a legal obligation on the part of auction houses to reveal the identity of their consignors might go some way towards reducing the number of illicitly-acquired antiquities reaching the open market.
Auction houses are also already required to make clear, via a symbol in their conditions of sale, which lots in the catalogue are the subject of “irrevocable bids” (third party underwriting of guarantees.)
Given that auction houses now frequently act as principals in auction transactions rather than as agents for the vendor, this Supreme Court ruling, if it is upheld, would require the auction houses to specify when they are themselves vendors in the transactions.
The ruling could blow a big hole in New York’s status as a centre of the world's art market.
The Chinese auction houses which have grown up as a result of the emergence of a powerful moneyed Chinese middle class are around to fill the void without asking too many questions.
