On Aug. 29, a New York federal judge once again dismissed Lazare Kaplan’s (LKI) nearly 7-year-old complaint against Antwerp Diamond Bank (ADB), ruling that it is more appropriate for the New York City diamond manufacturer to pursue its case in Belgium.
LKI first brought the much-publicized lawsuit against its former banker in December 2011. Its 163-page complaint charged that the now-defunct bank aided and abetted the misappropriation of millions of LKI’s diamonds by ADB client Erez Daleyot. Antwerp Diamond Bank, as well as parent company KBC, denied the charges. (Daleyot could not be reached for comment.)
In 2012, the New York court agreed with a motion from ADB that the case should be transferred to Belgium. LKI appealed, and in 2013, a higher court overturned the judgment and remanded the case back to the lower court, arguing the ruling did not properly address every aspect of the forum-selection issue.
A lot has happened since the suit was first filed. ADB dissolved in 2014, although LKI pressed the case against its former owner, KBC. And LKI, once a public company, was delisted from New York Stock Exchange—which, in court papers, it blamed on the uncertainty caused by the battle with its bank.
In 2017, LKI filed a streamlined amended complaint with new charges, including alleged bribery of bank employees. But the arguments over proper forum continued, with KBC arguing in its motion to dismiss that LKI agreed to a forum-selection clause in its initial agreement, which required it to bring this case to Belgium.
And now, after another year of legal wrangling, the court has again resolved the forum issue in favor of KBC and dismissed Lazare Kaplan’s case. Which means that the underlying issues may never get an airing in the United States, though in his opinion, Judge Andrew L. Carter Jr. asserted that “Belgium is an adequate forum” to hash things out.
“The substantive issues and conduct here have a greater relation to Belgium,” he wrote. “[The] alleged misconduct occurred overseas and only peripherally touches New York or the United States…New York does not have a strong interest in the alleged misappropriation of diamond proceeds and banking activities that occurred abroad.”
In any case, it’s possible the saga may not be over. LKI attorney Gary Stein tells JCK: “This is the second time that the district court has ruled that LKI, a New York company, should be forced to litigate this case in Belgium. The court of appeals reversed its prior ruling. LKI believes that this latest ruling is also erroneous and is reviewing all available options to keep the case in New York, which is where it properly belongs.”
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