Arab Bank wins U.S. appeal over thousands of terror-finance claims

NEW YORK (Reuters) - A U.S. appeals court ruled on Tuesday that thousands of non-U.S. citizens could not pursue claims against Arab Bank Plc for providing support to militant groups behind attacks in Israel and the Palestinian territories.

The 2nd U.S. Circuit Court of Appeals in New York upheld a 2013 ruling that dismissed lawsuits against the Jordan-based bank, which a jury last year found liable for providing material support for Hamas in a trial pursued by Americans.

Foreign victims of attacks they attributed to Hamas and other groups argued that a U.S. Supreme Court ruling later in 2013 meant the trial judge’s ruling was based on precedent that was no longer “good law.”

But the three-judge panel upheld the ruling by U.S. District Judge Brian Cogan in Brooklyn, saying the appellate ruling he relied on “remains the law of this circuit.”

U.S. Circuit Judge Robert Sack wrote the panel came to that conclusion even though the Supreme Court’s decision appeared to provide for corporate liability under the Alien Tort Statute, a 1789 law often used for pursuing human rights abuse claims.

Sack said a “growing consensus” exists among other appellate courts to that effect, and the 2010 2nd Circuit ruling Cogan relied on construing the statute as not allowing corporations to be sued “now appears to swim alone against the tide.”

But he said even if the panel agreed that corporate liability exists, it was not free to overrule the law set by a prior panel.

Michael Elsner, a lawyer for the plaintiffs, said he was disappointed with the decision and was examining a possible appeal.

Arab Bank said the ruling affected claims by more than 6,000 plaintiffs.

The plaintiffs accused Arab Bank of financing terrorism by providing services to Hamas, Palestinian Islamic Jihad, the Al-Aqsa Martyrs’ Brigades and others behind attacks in Israel, the West Bank, and the Gaza Strip from 1995 to 2005.

The ruling came after Arab Bank agreed in August to settle lawsuits by about 500 U.S. citizens who sued it under the U.S. Anti-Terrorism Act, which permits U.S. citizens to pursue claims arising from international terrorism.

The settlement came was reached ahead of a damages trial, after a federal jury in September 2014 found it liable in connection with two dozen attacks attributed to Hamas.

The verdict marked the first time a bank was held liable in U.S. court for violating that law.

The case is In Re: Arab Bank, PLC Alien Tort Statute Litigation, 2nd U.S. Circuit Court of Appeals, No. 13-3605.