A Lebanese bank can face claims in New York of negligence and breach of duty in a lawsuit brought by U.S., Israeli and Canadian victims of Hezbollah rocket attacks and their families, the state’s highest court ruled.
The victims sued American Express Bank Ltd. and Lebanese Canadian Bank in 2008, saying the banks helped the terrorist group attack targets in northern Israel in July and August 2006 by handling wire transfers of millions of U.S. dollars. The Lebanese bank, based in Beirut, merged with Societe Generale Lebanon last year.
U.S. District Judge George Daniels in 2010 dismissed a negligence claim against American Express. That decision was upheld in March by a federal appeals court, which also said it may later review claims of personal jurisdiction against Lebanese Canadian Bank that were dismissed by Daniels.
The federal appeals court also said it would seek a determination from New York’s highest court on whether claims of negligence and breach of duty can be applied to a foreign bank’s maintenance of correspondence under state law.
The state court today said the Lebanese bank’s “repeated use of the correspondent account shows not only transaction of business, but an articulable nexus or substantial relationship between the transaction and the alleged breaches of statutory duties,” Judge Susan P. Read wrote in the decision. “LCB did not route a transfer for a terrorist group once or twice by mistake.”
The case is Licci v. Lebanese Canadian Bank, 10-1306, 2nd U.S. Circuit Court of Appeals (New York).
To contact the reporter on this story: Chris Dolmetsch in New York at email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org