Arab Bank Rejected by U.S. Supreme Court on Terror Trial

The U.S. Supreme Court rejected an appeal by Arab Bank Plc, leaving in place sanctions imposed against it for disobeying court orders to provide account records to victims of overseas terrorist attacks.

The bank argued unsuccessfully that it can’t supply the information without violating the criminal laws of Jordan, Lebanon and the Palestinian territories.

The Amman, Jordan-based bank said it is confident it will ultimately prevail in the case.

“The unwillingness of the Supreme Court to review this interim appeal is not a determination on the merits of the case pending against Arab Bank,” it said in a statement. “Plaintiffs must still prove their case, and any judgment is subject to appeal.”

The sanctions will give the victims a head start at a trial, scheduled to start Aug. 11 in federal court in Brooklyn, New York. Jurors will be told they can infer from the bank’s failure to produce the documents that it intentionally provided financial services to terrorist groups.

The trial is set to be the first in the U.S. in a terrorism-financing suit against a bank. Arab Bank is accused of backing 24 attacks from 1995 to 2004 in Israel and the Palestinian territories perpetrated by Hamas, the Islamic group considered a terrorist organization by the U.S. and European Union. The bank allegedly helped provide payments to the families of suicide bombers.

Multiple Claims

Arab Bank faces hundreds of claims under the U.S. Anti-Terrorism Act. The lead lawsuit is being pressed by six American families, including Courtney Linde, whose husband, John Linde Jr., was killed in 2003 while working as a private security guard in the Gaza Strip.

Today’s Supreme Court rebuff came on the advice of the Obama administration. Government lawyers said the case wasn’t worthy of high court review even though a federal appeals court ruling allowing the sanctions was flawed.

Under the sanctions, Arab Bank will be limited in the defenses it can mount. The lender will be barred from using any of the withheld evidence at trial and from making any argument that might have been disproven using the account information.

“Hopefully, we’ve cleared the last roadblock to a trial on the merits,” said Gary Osen, a lawyer for the plaintiffs. “Our clients have waited 10 years for this moment.”

The bank said the lower court still may reconsider or modify the sanctions in light of U.S. concerns that they may undermine efforts to cooperate with financial institutions in the fight against terrorism.

The Supreme Court case is Arab Bank v. Linde, 12-1485. The district court case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).

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