Arab Bank asks US Supreme Court to cancel sanctions in terror financing suit

Bank allegedly transferred Saudi, Hezbollah money to Hamas leadership, families of Hamas prisoners and "martyrs."

June 26, 2013 05:17
3 minute read.
Arab Bank in Jordan.

Arab bank in jordan 370. (photo credit: Wikimedia Commons)

Arab Bank announced on Tuesday it had appealed to the US Supreme Court to overrule sanctions imposed on it by a lower court in a historic terror-financing case.

The bank’s appeal, filed on Monday, argues that the Second Circuit Court of Appeals in New York “erred when it failed to vacate severe sanctions imposed by Eastern District Court Judge Nina Gershon that trample on international comity and the Bank’s due process rights.”

The allegations in the Linde v. Arab Bank case involve the transfer of large amounts of money to Hamas leadership and institutions and families of Hamas prisoners and “martyr” – suicide bombers – via Saudi Arabia and Hezbollah’s al-Shahid Foundation.

In April, Gershon denied the Amman-based Arab Bank’s summary judgment motion and ruled that the blockbuster terrorism financing case should go to trial, making it the case which currently has the highest chance of going to trial against a major bank in US history.

The appeal also argues that the claims related to the Alien Tort Statute claims must be dismissed according to court precedent in the Kiobel case based on the idea that the court has no jurisdiction.

Overall, Arab Bank claims it was unfair for Gershon to impose evidentiary sanctions on it for failing to produce certain documents, when it did produce more than 200,000 pages of documents, and that producing the documents sought would have brought criminal sanctions against it in many countries where it operates.

Arab Bank said the sanctions included the judge telling “the jury to infer that the bank knowingly and purposefully supported terrorist acts and precluding it from introducing evidence to refute that inference – even though the bank’s state of mind is central to this case and it took great care to ensure that it did no business with terrorists.”

It indicated that these sanctions were so severe that they could influence the outcome of the trial.

The bank also noted that some similar cases have been dismissed in the past, and that in the Gill case against the bank, the court dismissed the case, holding that “Hamas is not the defendant; the bank is. And the evidence does not prove that the bank acted with an improper state of mind or proximately caused plaintiff’s injury.”

Gary Osen, one of the lead lawyers for the plaintiffs in the matter responded to the appeal, said that “at its core, Arab Bank’s argument is that protecting the privacy interests of dead Hamas leaders and suicide bombers justifies its defiance of multiple court orders requiring the bank to turn over their account records. It’s hard to imagine any court elevating the bank secrecy interest of these killers over the fundamental legal rights of their American victims.”

He added that 97-98 percent of certiorari petitions (a special appeal procedure in which the US Supreme Court can reject hearing an issue without holding full arguments) like Arab Bank’s get rejected and that the bank’s appeal probably had less of a chance than most and was a tactic to delay trial.

The lawsuit alleges that Arab Bank laundered Saudi payments to the families of suicide bombers and other funds intended for Palestinian terrorist groups through its Madison Avenue branch in New York City, which is no longer in operation.

The Saudi funds were then allegedly rerouted to local branches of Arab Bank in the West Bank and the Gaza Strip, and paid out to the personal accounts of hundreds of terrorists and their families, as well as to Hamas front organizations and other Palestinian terrorist groups.

Arab Bank claims there is a lack of proof that the funds have gone to terrorists, that the funds contributed directly and sufficiently to terrorist attacks and that the bank had any knowledge of any possible connection to terrorist attacks.

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