Archangel Diamond catches a break from Swedish Court

Vancouver – The Swedish Supreme Court has paved the way for Archangel Diamond (AAD-V) to begin fresh arbitration proceedings against Arkhangelskgeoldobycha (AGD) relating to a disputed partnership agreement governing diamond exploration at the Verkhotina project area in northwestern Russia.

Archangel Diamond holds a 40% interest in Almazny Bereg, a Russian open stock company involved in previous exploration of the Grib pipe at Verkhotina. The pipe hosts an estimated resource of about 98 million tonnes of kimberlite to a depth of 500 metres, containing 67 million carats of recoverable diamonds at an average mining grade of 69 carats per 100 tonnes, valued at an average of about US$79 per carat.

The legal dispute was triggered after AGD allegedly refused to transfer the Verkhotina diamond license to Almazny Bereg. Archangel Diamond sought various political and legal remedies over the years, with limited success. In the latest round, AGD applied for leave to appeal to the Supreme Court in an attempt to reverse a judgment by the Court of Appeal that had affirmed an earlier decision by a district court setting aside a 2001 decision of the Stockholm Arbitration Tribunal declining jurisdiction to hear the dispute between the parties arising from their 1993 diamond venture agreement.

Archangel Diamond’s lengthy battle through the Swedish courts took more than four years just to reach the point where the lower court rulings now have legal force, freeing the company to move its case forward. The Supreme Court gave no reason for its decision to deny AGD’s appeal application.