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Court orders Madison Avenue Diamonds to pay KGK Jewelry LLC
The order is toward a breach of contract dispute commenced by the parties in December 2012
By: Diamond World News Service
Sep 22 2015 12:29PM
Reference: 11947  

The Supreme Court of the State of New York County has ordered Madison Avenue Diamonds LLC (d/b/a Ivanka Trump Fine Jewelry), an exclusive wholesaler for Ivanka Trump's branded line of jewellery, and Shaindy Lax, a principal of Madison, to pay KGK Jewellery LLC $2.375 million, plus interest, in a breach of contract dispute commenced by the parties in December 2012.

Under the contract at issue, Madison was required to make a series of payments to KGK totaling $3 million for jewellery delivered by KGK to Madison and subsequently sold under the Ivanka Trump Fine Jewellery brand. Madison made the first agreed payment but refused to make all subsequent payments to KGK as required. Madison argued that it was relieved of its obligation to make the additional payments, as KGK allegedly had been one day late in returning certain computer design (CAD) files as specified under the agreement.

The Court has rejected Madison's defenses to payment in their entirety; and Judge Charles E. Ramos ruled that "Madison was never released from its further payment obligations to KGK" under the contract. (NYS Court, NY County, Decision and Order, Index No. 159045/2012, filed 8/21/2015). 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". Accordingly, Madison was compelled to make all of the agreed payments to KGK for the jewellery provided.

Moreover, the Court rejected Madison's request of further discovery and also belated attempt to amend its claims and defenses to payment by arguing that the jewellery provided by KGK was "of substandard quality".

KGK repeatedly has asserted that these allegations had no basis in this lawsuit. In granting KGK's motion for summary judgment before trial, the Court denied Madison's cross-motion to compel discovery and also denied Madison's cross-motion to file a second amended complaint.

In response to the ruling, Sanjay Kothari, Vice Chairman of the KGK Group, stated: "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. As it has done throughout its 110-year history, KGK complied with all obligations to its customers. 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 jewellery. "

"In a singularly desperate attempt to prevent KGK from enforcing its rights under the Court's Decision and Order, late evening on September 8, 2015 Madison filed what was an obviously frivolous and baseless "emergency" application, attempting to place a stay on KGK's enforcement of the Decision and Order dated August 21, 2015. On the morning of September 9, 2015 the Court emphatically denied Madison's "emergency" application."

The KGK group, established in 1905 by Kothari family of Jaipur, is a global corporation with fully integrated operations in the gems and jewellery industry, with presence across 15 countries.

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