NEW YORK, Jan 18 (Reuters) - A U.S. appeals court on Friday
let stand a sanction against Arab Bank Plc for failing
to turn over documents in a lawsuit accusing it of providing
banking services to Hamas and other U.S.-designated terrorist
groups.
The ruling applies to a group of cases pending in a U.S.
federal court in Brooklyn, New York. The lawsuits were filed on
behalf of U.S. citizens and foreign nationals who were the
victims, or family members of victims, of militant attacks in
Israel and the Palestinian territories between 1994 and 2005.
Currently, more than 100 families and 700 individuals are
seeking more than $1 billion in damages from Jordan-based Arab
Bank in the lawsuits, according to the plaintiffs' lawyers.
Friday's decision, handed down by the 2nd U.S. Circuit Court
of Appeals, stems from the original case, filed in 2004, which
has been consolidated with related lawsuits for pre-trial
matters. It is expected to go to trial later this year.
The 2nd Circuit said it has no standing to hear Arab Bank's
appeal until the case was resolved by the lower court. The
sanction, ordered by U.S. District Judge Nina Gershon in 2010,
means the jury in the case can consider the missing documents in
their verdict.
Arab Bank said in a statement that it is considering its
appeals options and "continues to believe that the district
court's sanctions order raises serious issues of international
concern."
A lawyer for the plaintiffs, Gary Osen, said he was pleased
with the appeals court's decision in the long-running case.
DOCUMENTS WITHHELD
Gershon ordered the sanction after the plaintiffs asked the
bank to turn over account information relating to groups known
to be, or suspected of being, linked to the designated terrorist
groups. Arab Bank withheld some of the requested documents,
saying that foreign bank secrecy laws prohibited their
disclosure.
Gershon's sanction would allow jurors to infer, if they
wished, that the bank's failure to produce those documents meant
that it had knowingly provided financial services to designated
terrorist organizations.
Arab Bank appealed, saying Gershon's punishment was overly
harsh and that the bank was being forced to choose between
running afoul of the U.S. court or violating bank secrecy laws
in Lebanon, Jordan and other countries where it operated.
The 2nd Circuit panel said its decision would not preclude a
future appeal of the sanctions order.
The case is Linde v. Arab Bank, 2nd U.S. Circuit Court of
Appeals, Nos. 10-4519 and 10-4524.
(Reporting by Jessica Dye; Editing by Tim Dobbyn)