Orrick Litigation Team Wins $1.5 Billion Second Circuit Appeal for KBC Bank

November.19.2019

A cross practice team of Orrick lawyers secured an important win today in the Second Circuit on behalf of KBC Bank, the largest bank in Belgium, in a nearly eight-year litigation battle against diamond company Lazare Kaplan International. The Second Circuit’s ruling, which affirmed a lower court decision granting KBC’s motion to dismiss, should put an end to the litigation in the U.S., a major win for our client.

Backing the arguments of our teams from our Complex Litigation & Dispute Resolution and Supreme Court & Appellate Groups, the Second Circuit agreed that the case should be litigated in Belgium, not the U.S. courts where Lazare has attempted to assert its claims.

The decision marks the latest turn in a case that began in 2011, when Lazare filed a $1.5 billion RICO complaint against KBC after defaulting on a $45 million loan from KBC.  The case involved an alleged international conspiracy to steal tens of millions of dollars of diamonds and proceeds from their sale, and a high-profile cast of characters, including Lazare chairman Maurice Tempelsman, and Erez Daleyot, a notorious diamond dealer who once controlled a third of all trade in diamonds.

There is ongoing litigation in Belgium between KBC and Lazare, and KBC maintained the entire case belonged in that forum. KBC initially won dismissal on forum non conveniens in 2012—requiring the case to be litigated in Belgium—but the Second Circuit reversed, ordering the district court judge to make factual findings on which of two disputed forum selection clauses applied.  Following substantial discovery and a two-day trial in February 2017, the district court last year again granted KBC’s motion to dismiss the complaint on the grounds of the forum selection clause and forum non conveniens

Lazare appealed yet again, prompting today’s Second Circuit ruling. The court completely adopted our arguments, assembled by a team led by partner Peter Bicks and partner Andrew Silverman, who argued in the Second Circuit. The appeals court held that the forum selection clause in the banking agreement required all but one claim to be litigated in Belgium, and it affirmed the dismissal of the sole claim remaining in the United States because Lazare did not comply with the contractual conditions precedent to bringing a lawsuit against KBC.  The decision not only assures the case will be litigated in Belgium, but also removes the threat of Lazare’s RICO claims.

In addition to Peter and Andrew, the Orrick team included Steve Foresta, Aaron Rubin, Thomas Fu, Ben Aiken, Danny Robertson, Hannah Ghaffari, Brittany Roehrs, Liz Walker, and Mike Abrams, as well as former Orrick Partner and current client Dick Martin and Helen Gredd of Lankler Siffert & Wohl.