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Arab Bank lawsuit (re terrorist attacks in Israel)

Arab Bank HQ Credit_jean pierre x_wikicommons

Between 2004 and 2010, families of the victims and survivors of the terrorist attacks in Israel, the West Bank and the Gaza Strip that occurred between 1995 and 2005 filed several lawsuits under the Alien Tort Statute and the Anti-Terrorist Act in a US federal district court against the Jordanian-based Arab Bank.  The plaintiffs are US and foreign nationals.  The lawsuits allege the Bank provided financial services that allowed several Palestinian militant organizations to engage in terrorist activities, claiming the Bank knew or should have known its accounts were being used to pay the families of suicide bombers.  Arab Bank denied the claims.

Between 2007 and 2010, the court dismissed all claims of foreign plaintiffs under the Anti-Terrorist Act. In 2013, a US judge also dismissed the claims of foreign plaintiffs under the Alien Tort Statute with reference to the Kiobel v. Royal Dutch Petroleum case, ruling that the plaintiffs cannot bring lawsuits against companies under this law. In 2016, the court of appeal affirmed the lower court's judgment and denied a rehearing of the case. On 3 April 2017, the Supreme Court accepted the plaintiffs’ request to decide on whether the Alien Tort Statute applied to companies and heard oral arguments on 11 October 2017. 

On 24 April 2018,  the U.S. Supreme Court ruled that foreign corporations cannot be sued in the US for complicity in human rights abuses abroad. The ruling, decided by a 5-to-4 vote upheld the decision of the United States Court of Appeals for the Second Circuit, in New York, which ruled in favor of Arab Bank arguing that corporations may not be sued under the Alien Tort Statute. According to the ruling, explicit congressional authorisation is required in cases involving international human rights cases against foreign defendants.

In 2014, the claims of US plaintiffs against Arab Bank went on trial.  The jury found the bank liable under the US Anti-Terrorist Act for knowingly providing assistance to Palestinian militant group Hamas and consequently being complicit in terrorist attacks that took place between 2001 and 2004.  Damages were to be assessed in a separate trial.  However, Arab Bank reached a confidential settlement with the US claimants ahead of the trial.

 All documents available here.

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13 May 2016

USA: The current state of Alien Tort litigation in the business & human rights context

Author: Michael Goldhaber, American Lawyer (USA)

"The Global Lawyer: The 'Zombie' Alien Tort, Three Years After Kiobel", 12 May 2016

When the U.S. Supreme Court restricted the reach of the Alien Tort Statute in Kiobel v. Royal Dutch Shell, I wrote that it had created a "zombie doctrine,” leaving the corporate alien tort not quite alive and not quite dead. Three years later, the zombie is looking rather spry. On Thursday the U.S. Court of the Appeals for the Fourth Circuit heard oral argument in an alien tort case accusing a military contractor of torturing detainees at Abu Ghraib prison. The case…was dismissed…on political question grounds after the Fourth Circuit had refused to dismiss it under Kiobel. Two weeks ago…, a different judge declined to dismiss the case against the psychologists who designed the "black site" interrogation program on either Kiobel or political question grounds…The Supreme Court has passed on the chance to revisit Kiobel at least twice…Most alien tort cases will continue to be blocked by defenses like justiciability or forum non conveniens…Prudent plaintiffs lawyers will develop strategies under state law, or under acts designed to combat terror, torture, or human trafficking. I stand by my point that the Alien Tort Statute requires sympathetic interpretation.


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10 May 2016

US federal court declines to rehear lawsuit against Arab Bank over alleged complicity in terrorist activities against Israelis

Author: Adam Klasfeld, Courthouse News (USA)

"Divided Circuit Won't Rehear Arab Bank Suit", 9 May 2016

Some judges may dislike it, but they must "swallow hard" and accept that precedent prevents victims of suicide bombings in Israel from suing Arab Bank, a Second Circuit majority said Monday. The families who brought the lawsuits went to court in the United States shortly after a spate of attacks against Israeli civilians between 2000 and 2004 known as the second intifada...[T]he relatives of foreign citizens killed in the attacks have struggled to advance their claims under a 1789 law known as the Alien Tort Statute. The Second Circuit cited the case of Kiobel v. Royal Dutch Petroleum this past December in extinguishing this part of the case....Facing a call to rehear the case en banc before the full court, the Second Circuit refused 4-3 on Monday...Judge Rosemary Pooler lamented [in] her dissent meanwhile that the court had botched an opportunity to fix a precedent that is "almost certainly incorrect... " ... When the Second Circuit first decided Kiobel I in 2010, it ignited controversy — and a stinging dissent — by appearing to insulate corporations of liability for overseas atrocities....


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8 December 2015

Arab Bank wins U.S. appeal over thousands of terror-finance claims

Author: Nate Raymond, Reuters

A U.S. appeals court ruled on Tuesday that thousands of non-U.S. citizens could not pursue claims against Arab Bank Plc for providing support to militant groups behind attacks in Israel and the Palestinian territories. The 2nd U.S. Circuit Court of Appeals in New York upheld a 2013 ruling that dismissed lawsuits against the Jordan-based bank, which a jury last year found liable for providing material support for Hamas in a trial pursued by Americans. Foreign victims of attacks they attributed to Hamas and other groups argued that a U.S. Supreme Court ruling later in 2013 meant the trial judge's ruling was based on precedent that was no longer "good law."…

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8 December 2015

Court Gutters Case by Foreign Terror Victims

Author: Adam Klasfeld, Courthouse News Service (USA)

Months after Arab Bank settled an anti-terrorism lawsuit filed by U.S. citizens, the Second Circuit refused today to revive a different case the bank faced by foreigners whose families were maimed or killed in attacks on Israel…Following suicide bombings on Israeli civilians between 2000 and 2004, families of the victims brought lawsuits in U.S. federal courts against Arab Bank and other institutions they accused of supporting terrorists. The U.S. citizen victims won a verdict holding Arab Bank liable for the attacks last year, and then reached a confidential settlement with the Amman, Jordan-based bank…Arab Bank still faced a lawsuit in Manhattan by foreign citizens killed in those attacks, but the Second Circuit ruled Tuesday that this case fails under the Alien Tort Statute…Nigerians brought the claims underpinning Kiobel, accusing the Netherlands-based oil giant being in league with the torture of activists who threatened their bottom line. Lack of jurisdiction ultimately kept the case from ever going to trial here. Citing that precedent, a three-judge panel of the Second Circuit found Tuesday that Arab Bank's foreign challengers are likewise without recourse in New York…[T]he plaintiffs are examining their options to appeal. Arab Bank said it is "pleased" with the circuit's ruling…

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8 December 2015

Jesner v. Arab Bank, In Re: Arab Bank, PLC Alien Tort Statute Litigation

Author: United States Court of Appeals for the Second Circuit

[Full text of decision]

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17 August 2015

Arab Bank & terrorism victims settle US lawsuit over complicity in attacks

Author: Andrew Keshner, New York Law Journal

"Arab Bank, Terrorism Plaintiffs Reach Settlement", 17 Aug 2015

Lawyers for Arab Bank and terrorism victims reached an agreement to settle the case after 11 years of vigorous litigation, just three days before the start of a damages trial…"The parties have reached an agreement to settle the litigation," Michael Elsner, a member of Motley Rice…said Friday…Elsner represents plaintiffs connected to one of the attacks at issue in the damages trial…A spokesman for the bank, Bob Chlopak, confirmed there was an agreement to resolve the case, but declined to comment further…In an interview days before news broke of the agreement to settle, David I. Miller, a partner at Morgan Lewis & Bockius who is not involved in the Arab Bank case, said "this is an area that banks are going to have to contend with in the coming months and years," speaking of civil Anti-Terrorism Act suits.

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9 April 2015

US court rejects Arab Bank's appeal of verdict finding it liable for providing financial assistance to Hamas

Author: Jonathan Stempel, Reuters

“Arab Bank loses bid to avoid liability for Hamas attacks - U.S. judge,” 8 Apr 2015

A U.S. judge…rejected Arab Bank['s]…bid to overturn a jury verdict finding it liable for knowingly supporting terrorism efforts related to a series of attacks in the Middle East. [A] U.S. District Judge...said the jury's verdict…"was based on volumes of damning circumstantial evidence that defendant knew its customers were terrorists." The plaintiffs were victims of 24 attacks in and around Israel that they said were carried out by Hamas. They accused Arab Bank of having provided material support to that group, in what lawyers called the first terrorism financing civil case to go to trial in the United States. [The judge] dismissed claims arising from two of the attacks, finding insufficient evidence that Hamas was behind them…A spokeswoman for Arab Bank had no immediate comment…

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13 October 2014

Accounts and Accountability: Arab Bank Found Liable for Transactions Under the Anti-Terrorism Act

Author: Fatema Merchant, Sheppard Mullin Richter & Hampton LLP in JD Supra

On September 22, 2014, a Brooklyn jury found Arab Bank, Jordan’s largest lender, guilty of violating the U.S. Anti-Terrorism Act for providing financial services to individuals and entities linked to Hamas…This is the first jury verdict to impute civil liability to a bank for its alleged role in financially transacting with alleged members or affiliates of a designated terrorist organization…The Arab Bank verdict could represent a serious threat to international financial institutions, triggering them to beef up their compliance beyond mere screening to more in-depth due diligence of their customers and transactions, especially in risky parts of the world.

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12 October 2014

Handling Hamas money just got a lot riskier for Middle East banks

Author: Michael Pizzi, Al Jazeera

As the dust settles on a landmark ruling against Jordan-based Arab Bank, found liable for knowingly processing transactions of Hamas members and thereby supporting its attacks on civilians, legal experts have just begun to parse the implications for banks that do business in the volatile Middle East. But as the case heads toward appeal, the world’s financial institutions have been put on notice: Turn a blind eye to clients designated by the U.S. as "foreign terrorist organizations," as Arab Bank was accused of doing, and face the consequences…The Arab Bank suit, and a series of others like it on dockets around the U.S., could have far-reaching implications for the region's economy if foreign banks and companies decide that doing business in the Middle East has become too risky.

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27 September 2014

Consorting with terrorists

Author: Economist

After a six-week trial it took only two days for a jury to find that Arab Bank knowingly provided assistance to Hamas…and consequently was complicit in two dozen terrorist attacks Hamas launched between 2001 and 2004 in which Americans were hurt or killed. The case was originally filed a decade ago and this week’s verdict notwithstanding, it is far from over. Damages will be assessed in another trial. Arab Bank…has vowed to appeal, labelling the proceeding “a show trial”, in which it was prevented from providing exonerating evidence by other countries’ laws on bank secrecy. The case was the first test of an anti-terrorism law passed in 1990 in response to the murder of an American tourist by Palestinian militants in 1985.

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