The company was accused of being engaged in an illegal scheme which resulted in bankruptcy of Archangel Diamond Corporation (ADC), a Canadian diamond development company. The action dates back to 2001 when it was filed in Colorado state court. For a number of years it was transferred from one court to another when it was informally stayed until early 2009, pending settlement efforts. In June 2009, ADC was held bankrupt. In November 2009, ADC inserted amendments into its complaint adding RICO and other claims. At this point the Archangel Diamond Corporation Liquidation Trust, which is the successor to the assets of ADC, pursues the action. The United States District Court for the District of Colorado took a decision by which dismissed the suit on December 18 due to lack of personal jurisdiction over OJSC Lukoil and based on the doctrine of forum non conveniens. In the ruling it is stated that “the Court finds that Lukoil has proved that the Russian courts are an adequate alternative forum, in light of Lukoil’s voluntary consent to the jurisdiction of such courts and forbearance in raising the statute of limitations as a defense in that forum”. The dispute took place in connection with an agreement ADC concluded with Arkhangelgeology (AGE), a Russian state corporation, to form a joint venture with the aim to finance exploration and development of diamond fields in Russia. AGE was privatized in December 1995 and became known as AGD. In 1996, AGD won the Diamond License and in 1996 opened a diamond pipe worth billions. ADC states that after OJSC LUKOIL took over AGD, the Russian company initiated an illegal scheme to exclude ADC out of the joint venture and diamond mining operation. “After obtaining as much investment as it could”, LUKOIL intended to “bleed ADC into bankruptcy and to cause it to lose its contractual rights and investment” . The claimant states that “as a result of this Illegal Scheme, ADC was forced into bankruptcy in 2010, and lost the value of its over $30 million investment as well as over $400 million in profits which it would earn through its 40% share of the joint venture, plus up to $800 million in lost profits which may be received by other diamond pipes potentially located within the scope of the Diamond License”.

All materials are protected by copyright of TV&P. If you need further information on the subject, contact Kristoffer Svendsen.

All news