ART MARKET; A mystery comes in from the cold

MARC CHAGALL is probably the best known Russian painter of the 20th century. Estranged from his fatherland from 1922 by Soviet disapproval of his art, he looks back in his paintings to Russian village life, turning it topsy-turvy, with lovers floating in the sky with huge bunches of flowers, above clusters of peasant houses. Now a wholly unknown Chagall painting has unexpectedly turned up for sale at Sotheby's; it is inscribed with the date 1917, the year of the Russian Revolution, and depicts the artist himself holding a palette with his home town of Vitebsk turned on its side, like a toy town, in front of him - it's called Self-portrait with Palette. They offered it in New York last month with an estimate of $5m- $7m, which would have made it one of the most expensive pictures by the artist ever sold at auction. But it didn't sell; the bidding stalled at $4.4m.

It was uncertainty surrounding the picture's origins that put buyers off. Sotheby's catalogue said that Chagall had given the painting to his sister when he left Russia in 1922 and the present owner had bought it from her descendants. Chagall had seven sisters, so this posed the question: which one? Sotheby's said the painting had left Russia in the 1990s but they could produce no export licence, which raised fears it might have been smuggled. And there was some new paint on the surface. Was this restoration or was the painting a fake, as one leading dealer assured me? People were reluctant to buy the painting on the available evidence regarding its authenticity and the present owner's right to sell.

The story of the painting which I have been piecing together is more like the plot of a spy movie than art history. According to the information given to one of Chagall's grand-daughters, Meret Meyer, the artist left the painting with his favourite sister, Lisa, who hid the canvas under her bed, wrapped up in a fur coat, for something like 50 years. Chagall was a proscribed artist during the Soviet era and Lisa could have been arrested for having the painting. She did not even tell her family about it, feeling that knowledge of it would be an embarrassment and a danger to her daughter, who had married a Soviet general. In the end Lisa told her grandson, one Igor Kornienko, and left the painting to him at her death 20 years ago.

I have been unable to trace Kornienko. No one, apart from the present owners selling through Sotheby's, appears to have had any contact with him. They say that he lives in St Petersburg and works for the secret service. In their account of the painting's provenance, he gave it to his daughter Oxana, who now lives in Israel. It was spirited out of Russia around 1990, when Russian law forbade the export of art works created before 1945 unless they had a licence from the Ministry of Culture.

I still have no clear picture of who bought it from Oxana. The Meyers were told that the painting now belonged to a dealer in Jerusalem called Meir Urbach, who had bought it in partnership with another Israeli. Urbach said that he was merely an agent for the owner, employed to help establish the authenticity of the painting, and he put me in contact with the owner's lawyer, one Mark Zell. "The present owner," Zell told me, "is a European corporation which holds various investments, including art. In mid-1992 I prepared the sale documentation. It is my understanding that the corporation had agents in the former Soviet Union who made contact with the family. The transaction took place in Switzerland."

"And what about an export licence?" I asked. "The contact was made at the moment when the state collapsed and export regimes evaporated - apparently an opportune time," he said.

I started my enquiries with Franz Meyer, author of the only detailed monograph on Chagall, who was formerly married to the artist's daughter, Ida. "When I saw the painting first it was dirty and in bad shape, which gave the composition an unbalanced look. There were parts that looked like Chagall but it wasn't beautiful. The second time, we looked at it in bright sunshine in the garden and I was convinced it was a Chagall," he said. "I think he started with a horizontal depiction of Vitebsk with himself floating over the city."

No one can sell an unknown Chagall in the West without Dr Meyer's blessing. All dealers and auctioneers would ask his opinion before laying out serious money. But even more important is the Comite Chagall, formed after the artist's death to pass judgement on the authenticity of works attributed to him on behalf of his heirs. The president is Jean Louis Prat, who runs the Fondation Maeght-Aime; Maeght was Chagall's dealer. The Comite also includes Ida Chagall's daughters, Meret and Bella Meyer, their brother, Piet Meyer, and Chagall's illegitimate son, David McNeil.

Meret Meyer told me that when she first saw the painting in Switzerland in 1992 she had very strong doubts. She had taken a well-known Basle restorer with her, Professor Dr Paolo Cadorin, who insisted that he could give no opinion without first testing it in his laboratory. He painstakingly studied every technical aspect of the painting and finally, in 1994, submitted a 50-page report saying that it must be a Chagall.

The report proved that it had been worked on, maybe 40 or 50 years earlier, by a ham-fisted Russian restorer who managed to unbalance the picture while covering up blemishes.

At a later stage, before the auction, a New York restorer did a brilliant cosmetic job to give the painting the bright "looks as if it was painted yesterday" appearance that modern buyers expect of 20th-century works - which involved losing some of Chagall's glazes and touching up damaged parts. Sotheby's condition report acknowledged problems. "Although well preserved on the whole, certain acute damages should be noted," it said. These included the fact that the canvas has been patched just over the artist's head and burnt on the lower right.

Before passing judgement, the Comite also insisted on knowing more about the painting's provenance; the owners flew Oxana Kornienko to Paris to tell its story in person. "Could Oxana provide any proof that it had belonged to Lisa Chagall?" I asked Meret Meyer. "No," Meret laughed, "but she was fort sympathique - so, of course, we believed what she said."

The owner's representative, Mark Zell, a lawyer to his backbone, insisted on meeting me in person rather than speak on the telephone. We met in Potomac, a suburb of Washington. "The family details are covered by a confidentiality agreement," he explained, adding that Igor Kornienko could be in danger from the Russian mafia if it became known he had made so much money from the painting.

Zell was amazed and outraged that it had taken the Comite Chagall two years to make up its mind on the picture's authenticity. The first informal approach was made to them in Octo-ber 1992 and the first formal meeting took place in March 1993. But a certificate was only issued in March 1995 after a dramatic session in the Centre Pompidou in Paris where the painting was compared with a similar work of the same date, Les Amoureux en gris, bequeathed to the museum by Ida Chagall. Professor Marina Bessonova, a Chagall expert from the Pushkin Museum in Moscow, was flown in at the owners' expense to add an input of Russian expertise. Self-portrait with a palette won its certificate.

I asked Professor Bessonova what she felt about the painting's unsanctioned export. "What to do?" she said. "There are many cases like this. To me, as a Chagall specialist, it doesn't matter. When an unknown painting appears, the best thing is to gather the Chagall committee - when you see the painting you see many interesting things." !