The case centres on a claim for breach of contract lodged against Christie's by a collector who claims the auction house backed out of a $40m guarantee for a Francis Bacon self-portrait that failed to sell in the New York autumn contemporary art series.
Weiss Family Art, a family trust led by the Connecticut collector George A. Weiss, offered Francis Bacon's Study for Self Portrait No. 1 from 1964 at Christie's Postwar and Contemporary Art sale in New York in November 12, 2008.
But, in a difficult sale, the lot which had been expected to bring in the evening's highest price failed without any actual bidding at $27.5m.
Weiss Family Art filed the complaint with United States Southern District Court of New York on April 3. It contends that during the consignment process in July 2008, Sotheby's and Christie's made competing offers to sell the picture.
In order to win the consignment from their rival, Christie's sweetened the deal with a $40m guarantee - a sum promised to the seller regardless of the sale's outcome.
However, according to the complaint, by September, after Weiss had consigned the picture to Christie's, the auction house said they could no longer honour the guarantee, citing "the changed climate of the art market".
It is not clear what response the Weiss family gave at the time, but the picture remained with Christie's who offered it for sale two months later. The catalogue entry did not carry the guarantee symbol, although catalogue entries for other lots in the sale did.
The trust claim "Christie's reneged upon the minimum price guarantee" and is suing for the $40m it says it was promised, plus interest.
Christie's have declined to comment.
The controversial guarantee process, that has helped bring many major works of art to the market in the past decade, is now under review following the failed gambles that accompanied the economic downturn. After incurring substantial losses, both Sotheby's and Christie's have all but abandoned guarantees for the coming year although have not ruled out using them completely.