The Supreme Court of the State of New York passed a judgment last March against Madison Avenue Diamonds – the company behind the Ivanka Trump Fine Jewelry brand – and company principal Shaindy Lax of $3,06 million, plus interest payable to an Indian De Beers sightholder KGK Jewelry for breach of contract.
Under the contract contested, Madison was required to make a series of payments totaling $3 million for jewelry delivered by KGK and subsequently sold under the Ivanka Trump Fine Jewelry brand.
Although Madison made the first specified payment, it later declined to make all subsequent payments to KGK as required.
It argued that it was relieved of its obligation to make the additional payments as KGK had been one day late in returning certain computer design (CAD) files as specified under the agreement.
Dismissing Madison's defenses to payment in their entirety, Judge Charles Ramos ruled that "Madison was never released from its further payment obligations to KGK" under the contract. He also said that, "KGK had complied fully with all of its delivery obligations to Madison, and Madison not only received the benefit under the agreement but ‘has also failed to show any damages’”.
Therefore, Madison was compelled to make all of the agreed payments to KGK for the jewelry provided.
Furthermore, the court rejected Madison's belated attempt to amend its claims and defenses to payment by arguing that the jewelry provided by KGK was of "substandard quality".
KGK argued that these allegations had no basis in the lawsuit.
"As KGK has maintained throughout the course of this unfortunate lawsuit, Madison never had any basis for withholding the contractual payments to which it had agreed,” said KGK vice chairperson Sanjay Kothari.
“As it has done throughout its 110-year history, KGK complied with all obligations to its customer here. We are pleased that the Court saw the matter exactly as we had, and that now we can return our attention to supplying the industry with beautiful gemstones and jewelry."
Although the court rejected Madison's belated attempt to amend its claims and defenses to payment, allegations of “substandard quality" jewellery were serious.
If true, that Ivanka was a victim of this chicanery, one might be tempted to say that she was not so fortunate unlike her father, Donald Trump, who surprised all and sundry by winning the U.S presidential race.
A report published by Diamond Intelligence Briefing (DIB) in March 2015 claimed that Ivanka’s own necklace fell apart during a board meeting.
“I was just in a very important meeting and the moonstone from my necklace fell onto the floor,” she was quoted as saying.
“It looks as though it was simply glued to the mounting. This is totally unacceptable…I am embarrassed to think that we are selling pieces with such flagrant disregard to quality considerations.”
That was not the only incident she had with the jewelry from KGK.
She also revealed in July 2010 that the rose gold chandelier earrings made her ears and neck green, so was her brother’s girlfriend who got the same earrings.
“I am very concerned as it cannot simply be the two of us that are adversely affected,” she was quoted as saying in the DIB report.
“I continue to have the issue even on the new pieces.”
An attempt by Rough & Polished to find out whether Ivanka Trump Fine Jewelry had had any encounter with synthetic diamonds was not successful.
However, with Ivanka Trump’s global profile having grown since her father’s poll victory in the United States, there is no doubt that she can be a strong voice against the presentation of synthetic diamonds as natural stones.
In 2015, a package containing 110 man-made diamonds being passed off as natural stones was intercepted in India, according to the Times of India.
In May 2012, the International Gemological Institute (IGI) received 1,000 stones at its labs in Antwerp and Mumbai to be certified as natural diamonds.
Of these stones, only 400 were natural diamonds, while the rest turned out to be synthetics.
Some synthetics were induced impurities that made them appear natural upon first inspection.
De Beers’ Diamond Trading Company Research Center also reported several cases of undisclosed submissions of synthetic diamonds to grading labs in China and India.
It said such mixed parcels were mainly prevalent in Asia.
Rapaport chairperson Martin Rapaport also said in 2013 that there were mixed parcels in India and China.
“This is not make-believe. I don’t believe people should think all is well. There is a real problem out there,” he said.
“This creates a very dangerous situation for the structure of the industry in terms of the smaller- and medium-sized dealers.”
He argued that there was need for the diamond industry players to have better control of their supply chains.
“I hope the solution is that we will pay more attention to who we buy from,” Rapaport said. “You need to know your suppliers. How much do you trust your people?"
The Wall Street Journal reports that a small team of scientists working for De Beers was busy finding ways to fend off an imminent threat that could tarnish the luster of natural-mined diamonds.
The diamond giant, itself a producer of synthetic diamonds, started marketing a new, cheap detector called PhosView last year, which quickly screens tiny synthetic diamonds.
Synthetic diamonds sparkle like mined stones and they are hard and durable enough for intense industrial purposes.
It’s not easy for an ordinary consumer to tell any difference between natural stones and synthetics.
De Beers helped launch a trade association with other producers last year to market the attraction of natural diamonds in a bid to counter the threat of synthetic diamonds.
Whether the campaign had been successful or not to date, one person who can help this cause is no doubt, Ivanka Trump, whose life testimonies and assumed high global profile would be convincing.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
