On Aug. 21, the New York State Supreme Court awarded Indian sightholder KGK a judgment of $2.4 million plus interest against Madison Avenue Diamonds, the company behind the Ivanka Trump Fine Jewelry brand, for breach of contract in an often-bitter dispute.
According to an opinion from Judge Charles E. Ramos, KGK’s supply arrangement with Madison Avenue Diamonds dissolved in 2012, with KGK charging Madison Avenue was not timely paying its bills, and the Trump side calling KGK’s product “substandard.”
The two signed a settlement agreement in June 2012, which called for Madison Avenue Diamonds to remit $3 million to KGK in a series of payments, and for KGK to return Madison Avenue Diamonds’ CAD files and other items within 45 days.
Due to a dispute over format, the CAD files ended up being delivered within 46 days. This, Madison Avenue argued, constituted a “material breach” of the agreement and relieved the company of the responsibility of making future payments.
KGK filed suit in December 2012, charging breach of contract.
After three years, the court ruled in favor of KGK on summary judgment, with Ramos finding that Madison “was never released from its further payment obligations to KGK,” especially since it accepted the files from KGK. He also maintained there was nothing in the settlement indicating that “time was of the essence,” and that Madison showed no damages from the one-day late delivery.
“This is a great victory,” KGK chief financial officer Pushpendra Khicha tells JCK. “It has been a long time coming. We knew the truth would win out.”
The case has received some attention in the international press, as Madison Avenue Diamonds claimed the items from KGK were of “substandard quality” and included synthetic diamonds. Evidence included an email from Trump herself that claimed a piece she was wearing fell apart during a meeting.
Khicha calls the allegations “baseless,” adding, “when you supply thousands and thousands of pieces, if one or two pieces need minor repairs, it’s no big deal. It happens,” he continues. “KGK is a 100-year-old company. We do all our business with due diligence and following ethical practices.”
Madison Avenue Diamonds says it has already appealed the ruling.
“Madison Avenue Diamonds is looking forward to the appellate review process to vindicate its position that KGK’s egregious conduct absolved it of any further payment obligations to KGK and resulted in the termination by Madison Avenue Diamonds of any further supply arrangements from KGK,” said a statement from Madison’s attorney Y. David Scharf.