The Court of Justice of the European Union has set aside a judgment by the General Court in favor of an EU Commission's decision, granting binding commitments offered by diamond giant De Beers to cease all purchases of rough diamonds from Russian mining power Alrosa.



A statement by Court said that Alrosa and De Beers "are active on the worldwide market for the production and supply of rough diamonds, on which they occupy the number two and number one positions respectively.



"In 2002 they notified the EU Commission of a trading agreement under which Alrosa undertook to supply rough diamonds to De Beers to the value of $800 million a year... In December 2004 Alrosa and De Beers proposed joint commitments to the Commission, providing for sales of rough diamonds by Alrosa to De Beers, to be reduced progressively to $275 million in 2010, and subsequently to be capped at that level. Those commitments were not accepted by the Commission."



In 2006, continued the statement, "De Beers individually offered new commitments to the Commission for the definitive cessation of all purchases of rough diamonds from Alrosa from 2009 (and on)," which the Commission accepted.



Nevertheless, in 2007 and following an appeal by Alrosa, the General Court annulled the Commission's decision, on the ground that it had failed to comply with the principle of proportionality, and had not respected Alrosa's right to be heard on the matter.



The Commission appealed to the Court of Justice, which found that the General Court infringed on the discretion enjoyed by the Commission, and "expressed its own differing assessment of the capability of the joint commitments to eliminate the competition problems identified by the Commission, before concluding that alternative solutions existed that were less onerous than a complete ban on dealings."



The Court consequently sets aside the judgment of the General Court, positioning itself to give final judgment in the matter and dismissing Alrosa's appeal.