Arab Bank Still on the Hook After Court Chucks Terror Verdict

MANHATTAN (CN) –  Overturning a verdict that blamed Arab Bank for 24 Hamas attacks in Israel, the Second Circuit on Friday effectively reduced a confidential settlement won by survivors and relatives of those attacks.

After 14 years of litigation involving hundreds of victims, Gary Osen, an attorney for one of families, emphasized that the ruling still provides “meaningful and very substantial compensation for their injuries.”

“We would have liked a sweeping victory, but we’re still very satisfied with the result,” Osen said in a statement.

“Today’s decision doesn’t diminish the fact a jury found Arab Bank liable for knowingly supporting Hamas,” Osen added. “For other victims of terrorism, this ruling makes clear that the Anti-Terrorism Act can still provide the justice and accountability they deserve.”

Paul Clement, a former U.S. solicitor general who represented Arab Bank for the firm Kirkland & Ellis, has not responded to an email seeking comment.

Because the bank funded leaders of Hamas leaders between 2000 and 2004, at the height of the spate of Palestinian suicide bombings in Israel known as the second intifada, another attorney for the victims, Tab Turner, dubbed it “the Bank of the Stars in the world of terrorism” at trial.

Arab Bank insisted meanwhile that it never knowingly dealt with Hamas or other groups designated as terrorists by the United States.

After a federal jury in Brooklyn found it liable under the Anti-Terrorism Act in September 2014, Arab Bank attributed the verdict to “errors in the admission of evidence, errors in the instructions, and errors in imposing sanction.”

Arab Bank faced up to $100 million in payouts but entered into a confidential settlement known as a “high-low” agreement a year later to avoid a damages trial. The terms of such deals guarantee different tiers of payment depending on the outcome of Arab Bank’s appeal, and the Second Circuit reversed for the bank on technical grounds Friday.

Agreeing with the bank about jury instructions, the federal appeals court said U.S. District Judge Brian Cogan made an error in saying that proof of the bank’s material support for terrorism would also implicate it in an “act of international terrorism.”

“The suicide bombing is unquestionably a violent act whose apparent intent is to intimidate civilians or to influence governments,” U.S. Circuit Judge Reena Raggi wrote for a three-judge panel. “But the provision of material support to a terrorist organization does not invariably equate to an act of international terrorism.”

Raggi’s 39-page ruling says the burden of proof is higher to find banks liable for terrorism.

“We conclude only that providing routine financial services to members and associates of terrorist organizations is not so akin to providing a loaded gun to a child as to excuse the charging error here and compel a finding that as a matter of law, the services were violent or life‐endangering acts that appeared intended to intimidate or coerce civilians or to influence or affect governments,” Raggi wrote.

Jordan-based Arab Bank also argued that there was not enough evidence to hold it liable, but Raggi disagreed.

“Arab Bank does not — and cannot — dispute the sufficiency of the evidence to prove that the Hamas terrorists who committed the three attacks at issue caused plaintiffs’ injuries, whether as a matter of proximate or but‐for causation,” Raggi wrote.

Sarri Singer, a plaintiff who was injured in a 2003 suicide bombing of a Jerusalem bus, said in a statement that the “technical reasons” for Friday’s decision do not concern her.

“The bottom line remains that we got our day in court, a jury held Arab Bank accountable for knowingly supporting terrorism, and the families hurt by them are going to get the help they need,” Singer said.

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