The Pelham water buffalo, an Imperial spinach-green jade carving and stand that sold for £3.4m at Woolley & Wallis on May 20.

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The 81/4in (20.8cm) long Imperial spinach-green jade buffalo dates from the Qianlong period (1736-95), and sits on a gilt bronze stand from the same period.

Dubbed the 'Pelham' water buffalo, the jade belongs to a group of monumental jade carvings, mainly of buffalos and horses, that once adorned the various palaces of Beijing. It was last on the market in 1938 when it was purchased by Sackville George Pelham, the 5th Earl of Yarborough, from London dealer John Sparks Ltd for £300. It was an excellent provenance.

The exact whereabouts of the buffalo was unknown until 2005, when the Earl's daughter, Lady Diana Miller, returned from Africa. It was found in a bank vault, wrapped in newspapers dated 1940 and housed in a wooden chest sealed with nails, string and sealing wax.

The same source had yielded the Richmond Gold Cup, a 1767 silver-gilt trophy made for Sir Lawrence Dundas to a design by Robert Adam c.1763 sold at W&W for £90,000 (plus 15 per cent buyer's premium) in October 2005.

Bidding on May 20 opened at £190,000 (the estimate of up to £500,000 had been available on request), but soon boiled down to a contest, conducted in bidding increments of £100,000, between a Hong Kong dealer on the telephone and Daniel Eskenazi, son of London dealer Giuseppe Eskenazi, in the room.

Eskenazi clinched it with a European client in mind at £3.4m - a price that leapt to over £4m when the 19.5 per cent buyer's premium was added.

Daniel Eskenazi told ATG the nuances that make this outstanding among a rarefied group of large Imperial jades. It was, he said, of a relatively small size, the turned head and inquisitive expression were deemed particularly appealing, while the emperor's mark to the base suggests it was made specifically for him to enjoy.

The price is among the highest paid for a piece of jade at auction.

The Salisbury Salerooms now hold the two highest prices generated by a UK regional saleroom - both for Chinese works of art that remain strong in an otherwise difficult antiques market.

The previous provincial record was the £2.6m (plus 15 per cent buyer's premium) bid for a 14th century Yuan dynasty porcelain double gourd vase at the equivalent sale in July 2005.

At the time it bettered by more than £2m the previous provincial high, although it is testament to the power of the regional saleroom to tap into the international market that subsequently the seven-figure barrier has been passed twice, by the pair of Fra Angelico panels at Duke's of Dorchester (£1.7m in April 2007) and a Rembrandt self portrait at Gloucestershire's Moore, Allen & Innocent (£2.2m in October 2007).

Confirming the continued strength of the Chinese market at its many levels, Woolley & Wallis's two-day sale of Asian Art on May 20-21 also ranks as the largest ever conducted by a regional auctioneer, with the hammer total a fraction over £5m.

The water buffalo was one of three outstanding Chinese jades offered in the Salisbury. The Buchanan-Jardine bitong, a Qing dynasty jade brush pot, also sold to Eskenazi at £460,000, while the Bruce Imperial bi disc carved with nine dragons sold to another buyer at £290,000.

By Roland Arkell