Arab Bank Plc must face Hamas financing trial-U.S. judge

NEW YORK, April 24 Wed Apr 24, 2013 7:18pm EDT

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NEW YORK, April 24 (Reuters) - A U.S. judge ruled on Wednesday that Arab Bank Plc must face claims in a U.S. court that it provided material support to the Palestinian group Hamas, lawyers said.

U.S. District Judge Nina Gershon in Brooklyn, New York denied Jordan-based Arab Bank's motion to dismiss the lawsuit that claims the bank provided material support in the form of financial services to Hamas.

The lawsuit was filed in 2004 on behalf of U.S. citizens who were the victims, or the family members of victims, of militant attacks allegedly committed by Hamas in Israel and Palestinian territories.

The plaintiffs accuse the bank of violating the U.S. Anti-Terrorism Act, which allows victims of attacks by U.S.-designated foreign terrorists organizations to seek compensation. The U.S. State Department designated Hamas as such an organization in 1997.

The case is expected to go to trial this fall, said Gary Osen, a lawyer for the plaintiffs, adding his clients are seeking potentially millions of dollars in monetary damages.

Arab Bank argued in court papers that the plaintiffs could not prove its actions caused, or meant to cause, any of the alleged attacks.

Gershon, while ruling that the trial could proceed, dismissed other claims that Arab Bank had aided and abetted in the murder and attempted murder of U.S. citizens.

Osen said that the plaintiffs were pleased with the ruling in the long-running case. "From our standpoint, it's time for the bell to toll," he said.

In a statement, Arab Bank spokesman Bob Chlopak said the bank "remains confident that the extensive evidentiary record will demonstrate at trial that the transactions at issue were routine and lawful, and the bank did not knowingly or proximately cause the acts of terrorism at issue in these cases."

U.S. judges have issued conflicting rulings on whether foreign banks can face lawsuits seeking damages under U.S. law for allegedly providing financial services to U.S.-designated terrorist organizations.

In September, U.S. District Judge Jack Weinstein who sits on the same bench granted Arab Bank's motion to dismiss a similar lawsuit, saying there was no proof the bank acted "with an improper state of mind or proximately caused the plaintiff's injury."

But Weinstein's fellow jurist, U.S. District Judge Dora Irizarry, ruled in late February that part of a similar case against Credit Lyonnias could proceed to trial.

The case is Linde et al. v. Arab Bank, U.S. District Court for the Eastern District of New York, No. 04-2799. (Reporting by Jessica Dye; Editing by Leslie Gevirtz)

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