US
court dismisses Archangel Diamond claim against Lukoil
Posted: 31 March 2004
Lukoil and OAO Arkhangelskgeoldobycha (AGD) won another expected
victory in the courts of Colorado. The Colorado Court of Appeals
affirmed a previous ruling of the District Court of the City and
County of Denver to dismiss a case filed by Archangel Diamond Corporation
(Archangel). The appellate court’s decision affirms the fact
that Lukoil and AGD are not subject to the exercise of Colorado’s
jurisdiction.
Archangel had sought to recover approximately $4.8 billion in damages,
comprised of $1.2 billion of actual damages and $3.6 billion of
punitive damages from Lukoil and AGD.
Despite the parties’ negotiations having taken place outside
of the United States, the property in question being located outside
of the United States, and all required contractual performance occurring
in the Russian Federation, Archangel argued in circumvention of
Colorado law and the Due Process Clause of the United States Constitution
and brought its claim in a Colorado court.
Recognizing this, the Colorado trial court dismissed this case
based on lack of jurisdiction on October 15, 2002.
Archangel appealed this dismissal. After hearing oral argument
and receiving voluminous briefing, the Colorado Court of Appeals
has affirmed the trial court’s judgment in a well-reasoned
opinion issued on March 25, 2004. In this opinion, the Colorado
Court of Appeals expressly agrees that Lukoil and AGD are not subject
to personal jurisdiction in Colorado.
This decision confirms what Lukoil has consistently argued –
that this case should be decided by the courts of the Russian Federation.
Lukoil has already publicly stated that it will submit to the jurisdiction
of the courts of the Russian Federation, and will abide by whatever
ruling the Russian court system reaches with regard to the contested
diamond license.
For more information see www.lukoil.com
Posted by Richard Price,
Editor Pipeline Magazine
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