MOSCOW, December 23 (RAPSI) – Russia’s oil producer OAO Lukoil won the dismissal of a long-running action accusing the company of being engaged in an illegal scheme which led Archangel Diamond Corporation (ADC), a Canadian diamond development company, to bankruptcy, according to the court records obtained by RAPSI on Tuesday.

The action dates back to 2001 when it was filed in Colorado state court. For a number of years it was tossed from one court to another when it was informally stayed until early 2009, pending settlement efforts.

In June 2009, ADC was placed into bankruptcy. In November 2009, ADC amended its complaint to add RICO and other claims. At this point the Archangel Diamond Corporation Liquidation Trust, which is the  successor to the assets of ADC, pursues the action.

The United States District Court for the District of Colorado ruled to dismiss the suit on December 18. The court dismissed the case for lack of personal jurisdiction over Lukoil and based on the doctrine of forum non conveniens.

“The Court finds that Lukoil has shown that the Russian courts are an adequate alternative forum, in light of Lukoil’s voluntary consent to the jurisdiction of such courts and forbearance in raising the statute of limitations as a defense in that forum” the ruling reads.

The dispute arose in connection with an agreement ADC entered into with Arkhangelgeology (AGE), a Russian state corporation, to form a joint venture in order to finance exploration and development of diamond fields in Russia.

AGE was privatized in December 1995 and became known as AGD.

In 1996, AGD won the Diamond License and in 1996 opened a diamond pipe worth billions, according to the documents.

ADC alleges that after LUKOIL took over AGD, the Russian company initiated an illegal scheme to cut ADC out of the joint venture and diamond mining operation. “After obtaining as much investment as it could”,  LUKOIL intended to “bleed ADC into bankruptcy and to cause it to lose its contractual rights and investment” .

“As a result of this Illegal Scheme, ADC was forced into bankruptcy in 2010, and lost the value of its over $30 million investment as well as over $400 million in profits which it would earn through its 40% share of the joint venture, plus up to $800 million in lost profits which may be generated by other diamond pipes potentially located within the scope of the Diamond License”, according to the complaint.