The following brief appears courtesy of IDEX Online
Author: Edahn Golan
Lazare Kaplan International is suing a number of insurance companies for $140 million in diamond losses. Lazare Kaplan, and three other associated companies, claims that $94 million in diamonds delivered to Gulfdiam were never paid for. $60 million in diamonds were sent by Gulfdiam to Gemport were never paid for. Another $34 million in diamonds that went to A.D. Middle East FZE and Overseas Hong Kong Ltd were “lost,” according to a court filing.
Lazare Kaplan International Inc., Pinnacle Ltd., Serenity 2 Ltd. and Lazare Kaplan Belgium N.V. filled suit against Swiss RE International Se, certain underwriters at Lloyd’s, The Marine Insurance Company Limited and GE Specialty Insurance (UK) Limited at the New York Southern District Court, claiming that the insurers refuse to pay for the losses.
In the past, Lazare Kaplan mentioned Gulfdiam DMCC in its SEC filing. Gulfdiam is a diamond trading company based in Dubai that deals mostly in rough diamonds.
According to the court filing, plaintiffs say they entered into business with Gulfdiam in 2006.
“Gulfdiam does not have control over the diamonds (…) and does not know the current whereabouts of the diamonds despite its extensive efforts to locate them and obtain payment,” the complaint states.
The remainder of the goods were allegedly destroyed or damaged in “the cutting and polishing operations in the Namibia manufacturing facility, Rough Diamond Trading China operations, and the DTC Sight operations,” the complaint states.
The allegation seems somewhat cryptic. Lazare Kaplan operates a polishing facility in Namibia, NemGem, which was set up by De Beers in the 1980s. However, it is not clear how goods can be damaged in DTC Sight operations.
The lawsuit says that the insurers refused coverage, despite contracts that cover up to $10 million per loss.