EC Appeal Should Be Approved in De Beers-Alrosa Case, Says Advisor

A legal advisor to the European Court of Justice recommended that the court accept the European Commission’s appeal to the ruling that forced it to reconsider an agreement between De Beers and Alrosa, the world’s two largest diamond companies.

“There can be no objection” to the commission’s conclusion about the accord, which restricted sales by Alrosa to De Beers, Advocate General Juliane Kokott of the European Court of Justice in Luxembourg said in a non-binding opinion Tuesday, Bloomberg reported, adding that the court follows the advice of its advocates general in a majority of cases.

The commission appealed the 2007 ruling by the Court of First Instance that annulled a European Commission decision of February 2006.

If the European Court of Justice accepts the recommendation, the diamond giants will not be allowed to buy or sale rough diamonds to each other.

The two diamond companies signed in 2002 a $4 billion, five year rough diamond trade agreement that was not approved by the European antitrust regulator. In 2006, De Beers bowed to EC pressure and agreed to gradually phase out its purchases from Alrosa, agreeing to stop all future rough diamond purchases after December 31, 2008.

Alrosa challenged the agreement between the antitrust authority and De Beers as unfair and disproportionate. The European Court of First Instance agreed with Alrosa.