Arab Bank Faces January Trial Over Israel Terror Attacks

Arab Bank Plc, Jordan’s largest bank, will go to trial Jan. 13 over claims it supported terrorist attacks in Israel, potentially putting the bank on the hook for hundreds of millions of dollars in damages.

A date for what is expected to be the first U.S. trial in a terrorism financing case against a bank was set by U.S. District Judge Brian Cogan in Brooklyn federal court, according to an entry posted today in the docket.

Jurors in the trial, anticipated to take two months, will be asked to find whether the bank bears responsibility for 24 attacks that injured or killed hundreds of people. Damages would be addressed separately by the court.

“We’re very pleased that there’s finally a light at the end of the tunnel and a horizon for something we’ve long desired, which is for the plaintiffs to have their day in court,” Gary Osen, a lawyer for some of the plaintiffs, said today in a phone interview.

In cases that have been litigated for almost a decade, victims allege that the Amman-based bank “knowingly and purposefully supported” foreign terrorist organizations from 1995 to 2004, including affiliates of Hamas, and helped provide payments to the families of suicide bombers.

Customer Records

The bank, which disputes the allegations, contends that it will be placed at an unfair disadvantage in the trial because of sanctions issued over its failure to provide customer records. As part of the sanctions, imposed by U.S. District Judge Nina Gershon, jurors will be told that they can consider the banks’ refusal to turn over the records as a sign that it did business with terrorists.

Arab Bank claims it’s forbidden from providing the records under laws of Jordan, Lebanon and the Palestinian territories. It has asked the U.S. Supreme Court to review rulings over the sanctions. The Union of Arab Banks and Kingdom of Jordan filed briefs in support of the bank.

During a status conference yesterday, Cogan said that he wouldn’t revisit the sanctions order. Cogan was assigned the case earlier this month after it was previously overseen by Gershon, according to the docket, which didn’t give an explanation.

“That’s what the bank has brought upon itself by not complying with Judge Gershon’s orders,” Cogan told an attorney for the bank, Shand Stephens.

Vital Role

The bank plays a vital role in promoting economic development in the Middle East and has been a leader in efforts to implement programs countering the financing of terrorism in the region, Bob Chlopak, a spokesman for the bank with Chlopak Leonard Schechter & Associates in Washington, said in a statement.

“The bank remains confident that the transactions at issue in these cases were routine and lawful, and the extensive evidentiary record will demonstrate at trial that it did not cause or contribute to the violence described by plaintiffs,” Chlopak said in the statement.

The case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).

Before it's here, it's on the Bloomberg Terminal.