Arab Bank contests US judge's sanctions ruling

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01 August 2010
AMMAN -- Arab BankArab Bank filed a motion last week for reconsideration of a recent ruling by a US judge in which the bank was sanctioned for allegedly failing to turn over requested documents proving it had no links to terrorist groups, a lawyer for the bank said.

On July 12, US District Court Judge Nina Gershon said in a ruling in Brooklyn, New York, that she would instruct jurors they may infer that the bank provided financial services to groups designated as terrorist organisations by the US and that it processed payments on behalf of a group called the Saudi Committee for the Support of Al Quds Intifada.

A few years ago, hundreds of Israelis filed lawsuits in a New York federal court against the bank for allegedly holding accounts that financed attacks that killed members of their families.

But Arab BankArab Bank said it will exercise all legal options to disprove such accusations, insisting that in compliance with the New York court's orders in this litigation, it produced hundreds of thousands of documents and successfully sought waivers from bank secrecy laws in several countries where it operates.

The bank's legal adviser Bob Chlopak, from Chlopak, Leonard, Schechter & Associates in Washington, DC, told The Jordan Times by e-mail on Thursday that the bank had filed a motion for reconsideration of that ruling along with a second motion to certify the court's order for interlocutory appeal in the event reconsideration is denied.

"Arab BankArab Bank strongly disagrees with the ruling of the court," Chlopak said, explaining that the former motion asks the court to reconsider its ruling and instead adopt the report and recommendation of Judge Victor Pohorelsky, "who found the state of mind inference and preclusion orders issued by the court were neither warranted nor necessary".

The reconsideration motion states that the court's July 12 order "rests on errors concerning the factual record and applicable legal standards, departs from vital principles of international comity, and permits the interests of private litigants to interfere with US foreign policy", he added.

The 41-page motion argues that "by depriving the bank of defences supported by its extensive production to date of documents and testimony, the sanctions order violates the bank's due process right to a fair trial".

The motion states that?"a juryة will be allowed [in practice, encouraged] to infer that the bank had the intent to facilitate those [terrorist] acts.Yet, as the court is aware, even the Israeli [army] found no evidence that '[Arab] Bank or any of its employees were involved in any way whatsoever in terrorist activities, or funded terrorism'."

In April of this year, Arab BankArab Bank filed with the US court a document provided by the Israeli military acknowledging that the bank has no links to terrorist activities, which it said was consistent with the bank's stand that the "claims in the pending lawsuits have no merit".

On February 25, 2004, Israeli troops, assisted by police and Shin Bet forces, raided the Arab BankArab Bank branch in Ramallah, seizing 40 million Israeli shekels ($10.8 million) from a number of accounts, as well as bank records.

"Seizure and confiscation of the monies in the aforementioned accounts was not based on information that indicated that the bank or any of its employees were involved in any way whatsoever in terrorist activities, or funded terrorism, whether regarding the aforementioned accounts, or in general," said the Israeli military's statement, which was translated from Hebrew and made available to The Jordan Times. "Further to that set forth above, no legal or administrative steps were taken against the bank or its directors [by Israeli authorities] for involvement in acts of terrorism or in funding terrorism, whether regarding the aforementioned accounts, or in general," the Israeli statement said, adding that Israeli authorities "have no intention of taking steps against Arab BankArab Bank for involvement in terrorist acts or in funding terrorism".

"Such a harsh sanction, which goes a long way towards directing the outcome of the litigation, is a punishment suitable only for gross misconduct, not for obedience to the law of the defendant's domicile and other jurisdictions in which it operates," the bank's motion stated.

Chlopak pointed out that the parties to the litigation have begun to exchange names of expert witnesses.?

The lawyer sent The Jordan Times a list of 11 witnesses Arab BankArab Bank plans to use, including former top leaders in the Israeli military, former leaders of Israel's security agency Shin Bet, a former top banking regulator in Israel and the former minister for social welfare in the West Bank and Gaza.

"Together, this extraordinary group will help the bank makes its case that it abhors terrorism and has not knowingly or intentionally supported or aided the work of identified terrorists or terrorist organisations," he stated.

By Omar Obeidat © Jordan Times 2010