A plethora of trial errors and excluded evidence: Arab Bank to appeal liable verdict on supporting Hamas by New York court

Published September 23rd, 2014 - 12:48 GMT

Arab Bank will appeal a New York jury that found the Amman-based bank liable on counts of providing material support to Palestinian group Hamas, its lawyer announced Tuesday.

On Monday, a New York jury found the Jordan's largest bank with over 600 branches worldwide was liable on 24 counts of supporting "terrorism" by transferring funds to Hamas.

The jury came after a month-long trial at the eastern district court in Brooklyn that followed a federal law suit filed in 2004 by hundreds of Israelis for allegedly holding accounts that financed attacks they claim killed members of their families in Israel and the Palestinian territories between 2001 and 2004. 

Global law firm DLA Piper, which is representing the Arab Bank in the trial known as Linde vs. Arab Bank,  said Monday's verdict came as no surprise because the proceeding conducted under the New York district court were based on improper sanctions, which the US government found to be "erroneous".

Hundreds of Israelis have filed lawsuits in a New York federal court against Arab Bank for allegedly holding accounts that financed attacks which killed members of their families in Israel and the Palestinian territories between 2001 and 2004. 

In 2005, plaintiffs requested that Arab Bank produce records of specified accounts maintained at its branches, primarily concerning organisations designated by the US as foreign terrorist organisations and their alleged affiliates. 

Arab Bank objected, arguing that producing the requested documents would violate bank secrecy laws and that it could face criminal sanctions if it gave US lawyers the confidential records of its customers. 

US District Court Judge Nina Gershon sanctioned the bank for failing to turn over requested documents proving it had no links to terrorist groups. 

The law firm made the announcement of the appeal on a special website (arabbankfacts.com) it maintains on behalf of the Amman-headquartered bank to share information about the litigation. 

“Arab Bank predicted that any proceeding conducted under the district court’s improper sanctions, which the US government found to be ‘erroneous,’ would be nothing more than a show trial," said the law firm in a statement issued after the verdict.

Once the Court eliminated the Bank’s defences, permitted weeks of inadmissible and inflammatory testimony of plaintiffs’ witnesses, and rejected the Supreme Court’s binding causation standard, the verdict against the Bank was inevitable. Under these circumstances, the verdict, finding the bank liable for legitimate and routine financial services, comes as no surprise, the law firm said.

“Taken together, the Court’s rulings excluded nearly all evidence about banking and put Hamas on trial, but as Judge Weinstein found in dismissing the related Gill case, ‘Hamas is not the defendant; the Bank is,’ it added.

Arab Bank believes it will ultimately prevail in this case. The trial was infected by scores of errors, and the Bank has very strong grounds for appeal. It will seek prompt review by the Second Circuit. In addition to the deeply flawed sanctions, the Court gagged the bank by excluding many of its witnesses, severely restricting the ability of other witnesses to testify, and precluding all evidence of its innocent state of mind.

“According to the US government, the district court’s sanctions, which penalised the bank for its cooperation with US counterterrorism investigations and its compliance with foreign law, ‘will warrant close scrutiny on appeal.’

Errors made by court 

The law firm listed a number of errors made by the court during the trial.

Sanctions prevented the bank from defending itself 

“In a May 23, 2014 amicus brief requested by the Supreme Court, the Solicitor General of the US government concluded that the Court ‘erred in several significant respects’ by imposing sanctions that severely penalised the bank for its compliance with the laws of the foreign jurisdictions in which it operated. Although the government suggested the sanctions could be modified or reconsidered prior to trial, the district court dismissed this recommendation out of hand.

 “At trial, the sanctions precluded the Bank from producing any evidence of its rigorous policies and practices to combat terrorism financing, its extensive cooperation with the law enforcement and intelligence communities of the US, among other nations, and the fact that the Israeli army determined that neither the Bank nor its employees were involved in any way in financing terrorism – all conclusive evidence of its innocent state of mind. The practical effect of these sanctions was best illustrated by the Court’s refusal to permit the Bank’s most senior officer, Chairman Sabih Masri, as well as other Bank employees, to testify about the Bank’s condemnation of terrorism and the measures it had taken to prevent the provision of services to terrorists.

Plaintiffs’ experts testified about the Saudi Committee; bank experts were excluded

“The district court also excluded all of the Bank’s witnesses who were prepared to testify that the Saudi Committee, a foreign aid agency of the Kingdom of Saudi Arabia, was a lawful humanitarian aid programme for a Palestinians impoverished by the conflict of the Second Intifada.

The jury never heard that the Saudi Committee’s humanitarian purpose was confirmed by senior US government officials, as well as other nations, and it was never designated by the US

The Bank was precluded from telling the jury that the Saudi Committee was overseen by Saudi Arabia’s chief counterterrorism official, who was praised upon his death in 2012 by President Obama for his cooperation with the US and his leadership in counterterrorism in the region. The plaintiffs’ witnesses, whom the Court permitted to testify, had never visited Saudi Arabia or met with any of its officials. By comparison, the Bank’s witnesses, whose testimony the jury was not permitted to hear, were internationally recognised experts on Saudi Arabia who had acquired substantial personal knowledge of its charitable practices and anti-terrorism policies.

Failure to apply the well-established causation standard

“The district court’s instruction that the Anti-Terrorism Act (ATA) requires only proof that the Bank’s services were a substantial contributor to plaintiffs’ reasonably foreseeable injuries was profoundly flawed.

The ruling conflicts with two very recent decisions of the Second Circuit Court of Appeals in ATA cases involving financial institutions, as well as two recent Supreme Court decisions that state unequivocally that proof of a direct causal relationship between the defendant’s alleged conduct and plaintiffs’ alleged injury is an essential requirement of any federal tort claim. In defiance of this binding precedent, the Court’s instruction permitted the jury to reach a liability verdict for injuries that had no direct connection to the Bank’ services, instead of requiring the direct and ‘but for’ causal connection that the law requires.

Improper exclusion of evidence of the bank’s compliance with foreign law

“The district court also excluded evidence of the Bank’s strict compliance with applicable foreign anti-terrorism and money laundering laws and regulations. This decision stands in sharp contrast to the ruling issued by Senior Judge Weinstein, who found the Bank’s compliance with foreign law to be highly probative of its state of mind and then dismissed a similar ATA case brought against it by the same plaintiffs’ lawyers.

“The full evidentiary record concerning the Bank’s practices and procedures, substantially all of which was excluded by the Court, shows that Arab Bank complied with applicable laws and regulations in each of the jurisdictions where it operates as a responsible and law-abiding institution. Neither the Saudi Committee nor the 11 Palestinian charities that the plaintiffs placed at issue in this case were designated by the US, the UN or the EU during the period in question.



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