An employee of an Israeli diamond and jewelry company was processing a diamond worth 1 million shekels (about $270,000) when it exploded, rendering it worthless. He is now being sued for the cost of the diamond.
The worker is the brother of the owner of the company.
The two companies that supplied the diamond decided to sue the worker personally at the Israeli Diamond Exchange Arbitration Tribunal, Israeli news site N12 reported.
The lawsuit is ongoing.
Attorney Avichai Yosef, who represents the defendant, said diamonds do sometimes explode while being developed.
“This is an event that sometimes occurs during the processing and polishing process, and usually the insurance covers the damage,” he said.
“In this case, there was no insurance coverage for the diamond, which is estimated to be worth about NIS 1 million,” he added.
The fact that there was a failure to buy insurance is at the heart of the suit, N12 reported.
“According to TASE [Tel Aviv Stock Exchange] regulations, all parties— the polisher, the buyer and others—are supposed to purchase insurance for the risks. It is clear that the lack of insurance is what caused the outbreak of the dispute that reached the door of the Diamond Exchange Arbitration Institute,” Yosef said.
He argued that the defendant was only an employee and not making independent decisions and therefore should not be held accountable.
The attorney asked the Tel Aviv District Court for a declaratory judgment, according to which the Diamond Exchange Arbitration Tribunal has no jurisdiction to hear the dispute.
Yosef also submitted a request to the Diamond Exchange for a temporary injunction to avoid conflicting decisions from the two courts.
“Court intervention in an internal arbitration proceeding of the stock exchange is indeed extremely rare,” Yosef said.
“But here, when it is clear that it was the company that signed the agreements and the employee acted only as an employee, the case constitutes a clear exception, and therefore there is a real chance of legal intervention,” he added.
“The goal is for the company to bear responsibility for its transactions, and not for the salaried employee, who is not supposed to pay a debt created by its business activity,” he said.
