The ruling by the 2nd US Circuit Court of Appeals in New York upholds an earlier decision by a lower court and deals a blow to lawfare efforts by Israel advocates.
It covers five separate lawsuits filed against the bank between 2004 and 2010 under the Anti-Terrorism Act and the Alien Tort Statute, which permits non-US citizens to sue in US courts for violations of international law.
The lawsuits represent 6,500 plaintiffs, around 500 of whom are US citizens, and includes people who claim they were directly injured or are family members of people killed or injured in the course of dozens of violent incidents.
Those suing the Arab Bank claim that the Amman-based institution had financed and facilitated operations by various armed Palestinian factions, including Hamas, Islamic Jihad and the Al-Aqsa Martyrs’ Brigades.
The Arab Bank has long denied the allegations, arguing that none of its clients were listed as “terrorists” by the Office of Foreign Assets Control, the US Treasury agency that enforces US economic sanctions.
The appeals court was not reviewing the substance of the allegations against the Arab Bank but whether foreign nationals could sue a corporation under the Alien Tort Statute. In 2013 a federal court in New York dismissed claims against the Arab Bank by the more than 6,000 foreign nationals, mostly Israeli citizens, on the basis of a 2010 ruling by the 2nd US Circuit Court of Appeals that non-US citizens could not sue corporations in US courts.
It left the claims by the hundreds of US citizens standing.
Later that year, a Supreme Court ruling narrowly expanded corporate liability under the Alien Tort Statute in cases that “touch and concern the United States,” giving hope to the non-US plaintiffs that their cases could be reinstated by the appeal court.
But Tuesday’s ruling, written by Judge Robert Sack, affirmed the lower court’s decision that non-US citizens could not sue corporations.
Michael Elsner, a lawyer for the plaintiffs, told reporters he was disappointed in the decision and was considering a further appeal.
Last September, a New York federal jury found the Arab Bank liable for damages to the several hundred US citizens in the case.
That verdict was believed to be the first successful civil suit to hold a bank liable under the anti-terrorism statute. This week’s appeal court ruling does not affect that decision. While the Arab Bank had vowed to appeal the jury’s verdict, in August it reached an undisclosed settlement.
The Arab Bank, founded in Jerusalem in 1930, is one of the largest financial institutions in the Middle East.