London, 15 July 2007 – LAWFUEL – The Law Firm Newswire – The Europe…

London, 15 July 2007 – LAWFUEL – The Law Firm Newswire – The European Court of First Instance has today annulled an earlier European Commission settlement decision accepting commitments from De Beers, the world’s largest rough diamond producer, to cease all purchases of rough diamonds from ALROSA Company, the world’s second largest rough diamond supplier.

This is the first time the European Court has set aside a Commission settlement made under the EU’s modernised competition enforcement regime. It is also the first time the European Court has recognised the need to proceed on an urgent basis outside of the merger context.

In February 2006, the Commission settled an investigation into an agreement by ALROSA to supply rough diamonds to De Beers by accepting commitments from De Beers to cease buying any rough diamonds from ALROSA. ALROSA did not consent to this settlement. The European Court today ruled that the Commission should have checked that the settlement was proportionate but did not do so, and should also have given ALROSA a full right to be heard on the settlement, which it did not.

Samantha Mobley, Competition partner at Baker & McKenzie, said: ”We are delighted with this judgment, which has implications beyond the facts examined. The Court confirmed that, when settling cases, the Commission must respect the principle of proportionality. Furthermore it must give relevant parties, such as our client, their full procedural rights.”

The Baker & McKenzie team advising ALROSA was led by Competition partners Samantha Mobley and Keith Jones. Romano Subiotto in Brussels and David Sabel in London from Cleary Gottlieb & Hamilton LLP, acted as co-counsel to ALROSA.

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