BEIRUT, Dec 16 (Reuters) – A US appeals court ruled this week that cases against Lebanese commercial banks can be tried outside Lebanon, according to a Reuters ruling, paving the way for more cases of depositors trying to free their freezes release funds.
The court decision, issued on Thursday in a case brought by Lebanese depositors against leading lender bank Audi, overturned a federal district court’s ruling that Beirut courts had “exclusive jurisdiction” to hear cases against Lebanese banks.
During Lebanon’s three-year financial collapse, banks have tightly controlled withdrawals in both US dollars and the local currency, which has lost more than 90% of its value.
These restrictions have yet to become law and have been challenged in both local and international courts by savers who have attempted to get their money back promptly in US dollars, with mixed results.
The Raad family filed a lawsuit in the New York Supreme Court in December 2020, saying Bank Audi breached its contract by refusing to wire its funds overseas at the start of the financial crisis, according to the court document.
Bank Audi took the case to a federal district court, which dismissed its claim on the grounds that such cases should only be heard by Lebanese courts.
Nada Abdelsater, an attorney with ASAS Law who is representing Patricia, Stephanie and David Raad alongside attorney Douglas Kellner, said this week’s new decision could allow them to proceed with the case and said it “made history”.
She said it was the first New York decision against a Lebanese bank since the crisis erupted in 2019.
“The door is now open and the real action begins,” she told Reuters.
“This decision rightly removes the main obstacle that has prevented cases from being opened so far … and this New York decision allows us to proceed with proceedings in competent courts outside of Lebanon,” Abdelsater added.
There was no immediate response from Bank Audi in Beirut to an after-hours request for comment.
Jeffrey Rotenberg, an attorney for DLA Piper representing Bank Audi in the case, said the decision was “no precedent”.
“In this case, there are several other emerging grounds for dismissal that we will continue to bring before the circuit court,” Rotenberg told Reuters via email.
Abdelsater said the Raads wanted access to $17 million they had at Bank Audi.
Reporting by Maya Gebeily in Beirut Editing by Tomasz Janowski and Matthew Lewis
Our standards: The Thomson Reuters Trust Principles.