US Supreme Court refuses to save Arab Bank from sanctions

Case involving allegations that bank facilitated transfer of funds to Hamas leaders, institutions via 3rd parties to go to trial on August 11.

By YONAH JEREMY BOB
US Supreme Court. (photo credit: REUTERS)
US Supreme Court.
(photo credit: REUTERS)
The US Supreme Court on Monday refused to save Arab Bank from a lower- court decision on sanctions that could seriously hurt its chances of fending off a blockbuster terror finance case by the families of terror victims.
The decision sends the historic case to trial, the first of its kind, on August 11. It will shine an unprecedented public light on terror financing in the Middle East.
The decision fell in line with a hotly-contested decision by the US government on May 28 to advise the Supreme Court that it supports sending the Arab Bank case to trial while potentially undermining the case’s strength. The context of the decision was the bank’s interim June 2013 appeal to the top court to reverse lower court decisions from April 2013 and earlier that significantly penalized the bank for refusing to turn over key documents the plaintiffs said they needed to prove their case.
The case itself, which has been featured on CBS News’s Sunday Morning program, involves allegations that Arab Bank facilitated massive transfers of funds to Hamas leaders and institutions, as well as to the families of suicide bombers and imprisoned Hamas members, via Saudi Arabia and Hezbollah’s al-Shahid Foundation, mostly between 1998-2004. The plaintiffs allege that the bank knew the funds were related to terrorists and terror groups and thus is civilly liable for wrongful death damages resulting from terror attacks perpetrated using those funds.
The Jordan-based Arab Bank, the country’s and one of the region’s largest, has said there is a lack of proof that the funds went to terrorists, that the funds contributed directly and sufficiently to terror attacks, and that the bank had any knowledge of a connection to terror.
It has refused to turn over certain documents to the plaintiffs, saying that doing so could incur criminal sanctions from Jordan and Lebanon for violating bank secrecy laws. However, a lower US court rejected this rationale and said a trial jury could infer that the refusal was like an admission of what the plaintiffs argued they would prove.
The bank enlisted the help of Jordan, which said its counter-terrorist cooperation with the US could be at stake. It made an interim appeal to the US Supreme Court, which asked the administration for its position.
The government said the court should not intervene prior to a trial (a win for the plaintiffs), but harshly criticized the lower court for not fully considering the foreign policy consequences of disregarding Jordanian sovereign interests in the case.
There is also a chance the case could be thrown out post-trial if those interests are ignored.
“Hopefully, we’ve cleared the last roadblock to a trial on the merits,” said Gary Osen, one of the lead lawyers for the numerous plaintiffs. “Our clients have waited 10 years for this moment.”
Arab Bank said it was still “confident it will ultimately prevail,” and that the “unwillingness of the Supreme Court to review this interim appeal is not a determination on the merits of the case pending against Arab Bank. Plaintiffs must still prove their case, and any judgment is subject to appeal.”