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Court Orders Pluczenik to Pay $3M Broker Fees
Dec 24, 2018 9:41 AM
By Rapaport News
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RAPAPORT... Diamond manufacturer Pluczenik must pay $3.3 million to a
broker that claimed the company breached a pact made almost 25 years ago, a court
has ruled.
The case dates back to a 1994 oral agreement between broker William
Nagel and Isaac Pluczenik, then CEO of Pluczenik. Nagel agreed to reduce his
commission for services at De Beers’ sights on condition Pluczenik retained
Nagel as its broker for as long as it was a De Beers client.
Chaim Pluczenik, who wasn’t present at the time of the deal, took
over from his father Isaac after his death in 1997. He severed his relationship
with Nagel in July 2013, after De Beers announced it no longer required
sightholders to work through brokers.
The case hinged on the wording of the verbal agreement.
Pluczenik claimed it had promised it wouldn’t hire a different broker — giving
it the right to go broker-free when De Beers changed its rules. Nagel, however,
maintained that Pluczenik had pledged to work with the brokerage as long as it
had a De Beers sight.
The Court of Appeal for England and Wales sided with Nagel
in a November 28 ruling, arguing that the distinction between retaining the
firm as a broker and not appointing another broker would not have occurred to
anyone when they made the pact, as De Beers still required a broker at the time.
That ruling upheld an earlier decision by the London Mercantile Court.
Attorneys for Pluczenik did not respond to a request for
comment at press time.
Image: A Pluczenik stand at a trade show. (Pluczenik)
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Tags:
Chaim Pluczenik, Court of Appeal for England and Wales, De Beers, Isaac Pluczenik, London Mercantile Court, Pluczenik, Rapaport News, W Nagel, William Nagel
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