A top European court on Wednesday struck down a decision by the European Commission which forced diamond producer De Beers to stop buying rough diamonds from Alrosa of Russia, the second-largest producer. "The Court of First Instance annuls the Commission's decision making binding the commitments proposed by De Beers to cease all purchases of rough diamonds from Alrosa," the court said in a statement.

The Commission said in February last year it had settled a monopoly abuse case with De Beers, which is 45 percent owned by mining conglomerate Anglo American, after the company agreed to halt the purchase of rough diamonds from Alrosa from 2009.

The Commmission said at the time the move would pave the way for more competition in the supply of rough diamonds.

"The Court takes the view in the present case that the complete prohibition of all commercial relations between the two parties with effect from 2009 is manifestly disproportionate," the court said.

The Commission said it would study the ruling carefully.

De Beers accounted for about half the world diamond market in 2005. Alrosa extracts nearly a quarter of the world's diamonds.