Appeals court rules in Lazare Kaplan’s favor
New York--The ongoing row between Lazare Kaplan and its former lender, Antwerp Diamond Bank N.V., will be returning to a New York courtroom following an appeals court reversal issued late last week.
On June 20, the U.S. Court of Appeals for the Second Circuit vacated the decision made in September 2012 by U.S. District Court in New York, which ruled that the case be tried in Belgium because it was a more suitable forum.
The appeals court remanded the case to district court for further proceedings.
Lazare Kaplan International President Leon Tempelsmen said the company was “gratified” by the appeals court’s decision.
Lazare Kaplan filed a more than $500 million lawsuit against Antwerp Diamond Bank and parent company KBC Bank N.V. in the United States in December 2011. Lazare Kaplan has implicated the banks in what court papers describe as a “sprawling international conspiracy” to steal diamonds and diamond proceeds that belong to Lazare. Filing a case in America allows Lazare Kaplan to seek treble (triple the amount of) damages under the U.S. Racketeer Influenced and Corrupt Organizations (RICO) Act.
In the case, the two parties disagreed over which of the two contracts--the contract Lazare Kaplan had with Antwerp Diamond Bank or the contract with KBC--govern Lazare’s claims. Each of the contracts has its own forum selection clause: disputes under the Antwerp Diamond Bank contract are to be tried in Belgium while the KBC contract dictates that disputes be resolved in New York.
In vacating the order of the lower court, the appeals court ruled that the district court failed to analyze properly the applicability of each forum selection clause in regards to the various aspects of the case.
The court “declined to choose between the two clauses, or even to decide whether the KBC account agreement applied to any part of Lazare’s complaint,” court documents state. Instead, the district court erroneously proceeded directly to analyzing if there was a more suitable forum in which the case should be heard.
In remanding the case to the lower court, the appeals court noted that it expresses “no opinion on the applicability of either of the two forum selection clauses or on the parties’ factual contentions as to the nature of their banking agreements,” and “no view on the merits of defendants’ other arguments for dismissal.”
The New York-based diamond company and the banks have been at war since March 2010, when the banks filed a civil suit against Lazare Kaplan in Antwerp for monies the diamond company allegedly owes.
Lazare Kaplan fired back with the filing of the civil suit in New York in December 2011, the one that just was remanded to district court on appeal, and added to that in April, filing a criminal case against Antwerp Diamond Bank in New York.