Arab Bank Plc settled a U.S. lawsuit with hundreds of terror victims who accused it of financing a wave of violence that killed or wounded Americans in Israel in the early 2000s.
The agreement avoids the damages phase of a trial that would have been a painful exercise to calculate the human cost of terrorism.
“The parties have reached an agreement to settle the litigation,” plaintiffs lawyer Michael Elsner, of the law firm Motley Rice LLC said in a statement. “The framework will be finalized over the next few months.”
The lender’s financial services were used by Hamas militants in carrying out devastating attacks against civilians during a Palestinian uprising, including suicide bombings in restaurants and public buses in Tel Aviv and Jerusalem from 2001 to 2004, a jury in Brooklyn, New York, found in September. It was the first trial of its kind in the U.S.
U.S. District Judge Brian Cogan was scheduled to begin questioning a group of potential jurors on Monday for the damages phase. Lawyers for the bank and about 300 terror victims and relatives agreed to settle instead.
Arab Bank’s lawyer, Shand Stephens, didn’t immediately return a call Friday seeking comment on the settlement.
A six-week trial last year highlighted the ways banks can play a role in funding terrorist groups and the extent to which they can be held responsible in court for monitoring customers.
The trial was the first against a bank on civil claims of violating the U.S. Anti-Terrorism Act, which lets American citizens who are victims of terrorism sue supporters of attacks.
Arab Bank, the biggest lender in Jordan, was found liable for doing business with more than 150 Hamas leaders and operatives.
Cogan in April rejected Arab Bank’s bid to set aside the jury’s finding. The judge also dismissed claims related to two of the attacks, ruling there wasn’t enough evidence Hamas was to blame.
Arab Bank said in a statement in April that Cogan’s rejection of a new trial on liability was “predictable” and “fundamentally flawed.”
Arieh Spitzen, the former head of the Israeli military’s Department of Palestinian Affairs, testified in the first trial phase that Arab Bank transferred about $4 million from 2000 to 2001 to as many as two dozen Hamas leaders and operatives through its New York branch.
Arab Bank Chairman Sabih Al Masri, testifying for the company, said the attacks “destroyed opportunities for peace” and denied ever hearing that the bank supported terrorism.
Al Masri, who took over management of the lender in 2012, told jurors his brother was killed by a terrorist and his own life had been threatened because a company he owns supplied food to U.S. troops in the Middle East.
The plaintiffs alleged there was a well-known link between Arab Bank and Hamas, the Palestinian militant group that was designated a terrorist organization in 1997 by the U.S.
The trial went into detail about each attack in the case, including the suicide bombing of a crowded bus in Jerusalem in August 2003 that killed 23 people. Among the victims was Tehilla Nathansen, a 3-year-old whose family was returning from prayers at the Wailing Wall.
Arab Bank started in Jerusalem in 1930 and is now based in Amman. The lender has about 600 branches worldwide, including the office in Manhattan and a presence in Palestinian territories.
The case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).