Roger Smith says he still processing news of the record-breaking price paid at Sotheby’s Important Watches auction in Geneva, which saw a co-signed Millennium watch, co-signed by himself and his mentor George Daniels, sell for CHF 2,177,500 ($2.4m), more than double its pre-sale estimate.
The sale was a bright spot in a gloomy, and at times controversial autumn auction season in Geneva.
First, the seasonal sales were rocked by Only Watch having to postpone until 2024, giving it time to reassure markets about how the $100 million it has raised is being spent.
Christie’s Geneva, which was scheduled to host the Only Watch auction, then found itself in the eye of a second storm when there were irregularities at the opening of its Passion for Time sale concerning third party guarantees that were considerably higher than pre-sale estimates that were in the public domain right up until the start of Monday’s auction.
Third party guarantees are like spread betting on the outcome of an auction, and have been used more commonly in the art world.
Like a spread bet, the third party guarantor picks a price for every lot, which is agreed with the auctioneer and effectively sets a minimum price, and therefore the bottom end of a pre-sale estimate.
If a lot sells for over that price, the guarantor stands to profit. If bids fall short of the price, the guarantor has to cover the difference and take the watch at the guaranteed price.
For somebody consigning their treasures to an auction, the guarantee is attractive particularly, as seems to have been the case at Christie’s, if it was pitched above the likely market prices of the watches.
In the case of the Christie’s Passion of Time sale, it is reported that a single investor pitched a third party guarantee as a bet on the entire auction.
The guarantee was offered and accepted at a higher price than the original estimates, which then had to be revised just as the sale was beginning.
Thereafter a mystery bidder, who is described in a social media pile-in as “Paddle 1013”, appeared to be winning most of the lots at prices around the bottom end of the new estimates.
For example, a Rolex GMT Master owned and worn by Marlon Brando in Apocalypse Now, initially had an estimate of CHF 1–2 million, but just as the sale was due to begin, the estimate was revised to CHF 3.75–6.5 million.
The watch then sold for CHF 4.6 million, pretty much on the nail with the new estimate once fees are added.
It was one of 113 watches that raised bids totalling $42,418,914 at the November auction.
Last week the drama increased after the owner of all watches consigned to the Christie’s Passion of Time auction, Omani businessman Mohammed Zaman, filed a civil complaint in Geneva against Christie’s and the court issued an order that the entire consignment remain under lock and key with the auction house pending resolution of the case, Christie’s said.
Christie’s had already notified all winning bidders that they should not complete transactions for the watches.
In answers to questions posed by Bloomberg’s Andy Hoffman, Christie’s explained that “Mr. Zaman is regrettably blocking Christie’s from releasing watches to the successful buyers at the ‘Passion for Time’ sale”.
“Christie’s has taken immediate steps to challenge this interference with the sale process and is hoping for swift resolution,” the auction house continued. “We deeply regret the inconvenience caused to our valued clients pending that outcome.”
Geneva-based lawyer Rodolphe Gautier, who is representing Mr Zaman said he will not be commenting on pending proceedings.
