Orrick Wins Significant Victory for KBC in Diamond Theft Case


Orrick, Herrington & Sutcliffe LLP recently secured a significant victory in the United States District Court for the Southern District of New York for Belgian bank KBC, a longtime Orrick client. The plaintiff, Lazare Kaplan International, the largest diamond manufacturing and distribution company in the United States, filed a US$1.5 billion RICO lawsuit against KBC and its subsidiary, Antwerp Diamond Bank (ADB), in December 2011. The suit was based on the alleged theft of US$135 million in diamonds from Lazare's Belgian and other foreign subsidiaries.

Orrick had previously won an important early victory to stay discovery and later moved to dismiss the complaint on multiple grounds. KBC and ADB argued that Lazare's complaint should be dismissed because a contractual forum selection clause between ADB and Lazare required Lazare to bring all claims against the bank in Belgium. KBC and ADB further argued that the complaint should be dismissed for forum non conveniens in favor of a Belgian proceeding because all of the allegedly illegal activities in the complaint took place in Belgium and elsewhere outside the United States, and because a lawsuit involving similar claims is currently pending between ADB and Lazare (and its Belgian subsidiary) in Belgium. The banks also argued that Lazare's RICO claim should be dismissed because RICO does not apply to the extraterritorial activities alleged in the complaint. Finally, KBC and ADB's motions pointed out numerous pleading deficiencies in the complaint.

On September 5, 2012, Judge Andrew Carter ruled in favor of KBC and ADB, granting their motions to dismiss the complaint for forum non conveniens. Judge Carter's opinion noted in particular that the "circumstances generally indicate forum shopping" by Lazare.

The Orrick team included New York commercial litigation partner Peter Bicks, New York securities litigation partner Dick Martin, New York restructuring partner Laura Metzger, New York litigation senior associates Philipp Smaylovsky and Catharine Zurbrugg, New York litigation managing associate Danny Robertson and New York litigation associate Rebecca Briggs.