US court upholds Arab Bank sanction in Hamas finance case

Jessica Dye
Reuters Middle East

NEW YORK, Jan 18 (Reuters) - A U.S. appeals court on Friday

let stand a sanction against Arab Bank Plc for failing

to turn over documents in a lawsuit accusing it of providing

banking services to Hamas and other U.S.-designated terrorist


The ruling applies to a group of cases pending in a U.S.

federal court in Brooklyn, New York. The lawsuits were filed on

behalf of U.S. citizens and foreign nationals who were the

victims, or family members of victims, of militant attacks in

Israel and the Palestinian territories between 1994 and 2005.

Currently, more than 100 families and 700 individuals are

seeking more than $1 billion in damages from Jordan-based Arab

Bank in the lawsuits, according to the plaintiffs' lawyers.

Friday's decision, handed down by the 2nd U.S. Circuit Court

of Appeals, stems from the original case, filed in 2004, which

has been consolidated with related lawsuits for pre-trial

matters. It is expected to go to trial later this year.

The 2nd Circuit said it has no standing to hear Arab Bank's

appeal until the case was resolved by the lower court. The

sanction, ordered by U.S. District Judge Nina Gershon in 2010,

means the jury in the case can consider the missing documents in

their verdict.

Arab Bank said in a statement that it is considering its

appeals options and "continues to believe that the district

court's sanctions order raises serious issues of international


A lawyer for the plaintiffs, Gary Osen, said he was pleased

with the appeals court's decision in the long-running case.


Gershon ordered the sanction after the plaintiffs asked the

bank to turn over account information relating to groups known

to be, or suspected of being, linked to the designated terrorist

groups. Arab Bank withheld some of the requested documents,

saying that foreign bank secrecy laws prohibited their


Gershon's sanction would allow jurors to infer, if they

wished, that the bank's failure to produce those documents meant

that it had knowingly provided financial services to designated

terrorist organizations.

Arab Bank appealed, saying Gershon's punishment was overly

harsh and that the bank was being forced to choose between

running afoul of the U.S. court or violating bank secrecy laws

in Lebanon, Jordan and other countries where it operated.

The 2nd Circuit panel said its decision would not preclude a

future appeal of the sanctions order.

The case is Linde v. Arab Bank, 2nd U.S. Circuit Court of

Appeals, Nos. 10-4519 and 10-4524.

(Reporting by Jessica Dye; Editing by Tim Dobbyn)

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