U.S. top court to weigh Jordan-based bank's liability for militant attacks

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday agreed to consider reviving litigation seeking to hold Arab Bank Plc financially liable for militant attacks in Israel and the Palestinian territories that accused the Jordan-based bank of being the “paymaster” to militant groups.

The justices agreed to hear an appeal by roughly 6,000 plaintiffs, who included relatives of non-U.S. citizens killed in such attacks and survivors of the incidents, of a lower court ruling throwing out the litigation.

The plaintiffs accused Arab Bank under a U.S. law called the Alien Tort Statute of deliberately financing terrorism, including suicide bombings and other attacks. They are hoping to overturn a 2015 New York federal appeals court ruling that the bank could not be sued under the statute because it is a corporation.

The Alien Tort Statute, a law dating back to 1789, lets non-U.S. citizens seek damages in U.S. courts for human rights violations abroad. The lead plaintiff in the case is Joseph Jesner, whose British citizen son was killed at age 19 in a 2002 suicide bombing of a bus in Tel Aviv.

The plaintiffs filed several lawsuits under the law in Brooklyn federal court, claiming Arab Bank used its New York branch to transfer money and “serve as a ‘paymaster’ for international terrorists.”

The transfers helped Hamas and other groups fund attacks and reward families of the perpetrators between 1995 and 2005, the suits alleged.

The bank said in court papers that the U.S. government has called it a constructive partner in the fight against terrorism financing. The bank said only four transactions out of 500,000 involved “designated terrorists” by the U.S. government, and they were the result of machine or human error.

The bank also cited a separate 2010 case, Kiobel v Royal Dutch Petroleum, in which the New York-based 2nd U.S. Circuit Court of Appeals ruled that corporations cannot be sued under the Alien Tort Statute.

After reviewing that case, the Supreme Court in 2013 narrowed the law’s reach, saying claims must sufficiently “touch and concern” the United States to overcome the presumption that the Alien Tort Statute does not cover foreign conduct.

But the high court declined to explicitly decide whether the 2nd Circuit ruling on corporate liability was correct.

Based on the Kiobel ruling, the 2nd Circuit threw out the litigation against Arab Bank.

The plaintiffs appealed to the Supreme Court, urging it to decide once and for all whether or not corporations are shielded over foreign conduct.

Reporting by Andrew Chung; Editing by Will Dunham