US court decision paves way for depositor case against Lebanese bank By Health & Fitness Journal

©Health & Fitness Journal. Lebanese Army soldiers stand guard during a protest organized by Depositors’ Outcry, a group lobbying for angry depositors, near the Lebanese Central Bank building in Beirut, Lebanon October 5, 2022. REUTERS/Aziz Taher /File Photo

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By Maya Gebeily

BEIRUT (Health & Fitness Journal) – A US appeals court ruled this week that cases against Lebanese commercial banks can be tried outside Lebanon, according to a Health & Fitness Journal decision, paving the way for more cases of depositors trying to free their frozen funds.

The court decision, issued on December 15 in a case brought by Lebanese depositors against leading lender bank Audi, overturned a subdistrict court’s ruling that Beirut courts had “exclusive jurisdiction” to hear cases against Lebanese banks to negotiate.

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 New York in December 2020, saying Bank Audi breached its contract by refusing to transfer its funds abroad at the start of the financial crisis, according to the court document.

A district court dismissed their lawsuit on the grounds that such cases should only be heard in Lebanese courts.

Nada Abdelsater, a lawyer representing Patricia, Stephanie and David Raad, said this week’s new decision could allow them to proceed with the case and said it “made history”.

“The door is now open and the real action begins,” she told Health & Fitness Journal.

“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 Health & Fitness Journal via email.

Abdelsater said the Raads wanted access to $17 million they had at Bank Audi.